Correlation Between Citigroup and Kinea Creditas

Can any of the company-specific risk be diversified away by investing in both Citigroup and Kinea Creditas at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Citigroup and Kinea Creditas into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Citigroup and Kinea Creditas Fundo, you can compare the effects of market volatilities on Citigroup and Kinea Creditas and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Citigroup with a short position of Kinea Creditas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Kinea Creditas.

Diversification Opportunities for Citigroup and Kinea Creditas

-0.54

Correlation Coefficient

Citigroup  Kinea Creditas

Excellent diversification

The 3 months correlation between Citigroup and Kinea is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Kinea Creditas Fundo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinea Creditas Fundo and Citigroup is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Citigroup are associated (or correlated) with Kinea Creditas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinea Creditas Fundo has no effect on the direction of Citigroup i.e., Citigroup and Kinea Creditas go up and down completely randomly.

Pair Corralation between Citigroup and Kinea Creditas

Taking into account the 90-day investment horizon Citigroup is expected to generate 4.59 times less return on investment than Kinea Creditas. In addition to that, Citigroup is 1.62 times more volatile than Kinea Creditas Fundo. It trades about 0.01 of its total potential returns per unit of risk. Kinea Creditas Fundo is currently generating about 0.11 per unit of volatility. If you would invest  818.00  in Kinea Creditas Fundo on December 29, 2024 and sell it today you would earn a total of  67.00  from holding Kinea Creditas Fundo or generate 8.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Citigroup  vs.  Kinea Creditas Fundo

Citigroup

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Citigroup is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Kinea Creditas Fundo

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kinea Creditas Fundo are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak basic indicators, Kinea Creditas may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Citigroup and Kinea Creditas

The main advantage of trading using opposite Citigroup and Kinea Creditas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Kinea Creditas can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Kinea Creditas will offset losses from the drop in Kinea Creditas' long position.

The idea behind Citigroup and Kinea Creditas Fundo pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.