Correlation Between Citigroup and ADHI KARYA

Can any of the company-specific risk be diversified away by investing in both Citigroup and ADHI KARYA 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 ADHI KARYA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Citigroup and ADHI KARYA, you can compare the effects of market volatilities on Citigroup and ADHI KARYA 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 ADHI KARYA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and ADHI KARYA.

Diversification Opportunities for Citigroup and ADHI KARYA

-0.7

Correlation Coefficient

Citigroup  ADHI KARYA

Excellent diversification

The 3 months correlation between Citigroup and ADHI is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and ADHI KARYA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADHI KARYA 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 ADHI KARYA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADHI KARYA has no effect on the direction of Citigroup i.e., Citigroup and ADHI KARYA go up and down completely randomly.

Pair Corralation between Citigroup and ADHI KARYA

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.61 times more return on investment than ADHI KARYA. However, Citigroup is 1.63 times less risky than ADHI KARYA. It trades about 0.14 of its potential returns per unit of risk. ADHI KARYA is currently generating about -0.27 per unit of risk. If you would invest  6,255  in Citigroup on September 23, 2024 and sell it today you would earn a total of  664.00  from holding Citigroup or generate 10.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	97.73%
Values	Daily Returns

Citigroup  vs.  ADHI KARYA

Citigroup

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Citigroup may actually be approaching a critical reversion point that can send shares even higher in January 2025.

ADHI KARYA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ADHI KARYA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Citigroup and ADHI KARYA

The main advantage of trading using opposite Citigroup and ADHI KARYA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, ADHI KARYA 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 ADHI KARYA will offset losses from the drop in ADHI KARYA's long position.

The idea behind Citigroup and ADHI KARYA 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.