Correlation Between Citigroup and PT UBC

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

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

Diversification Opportunities for Citigroup and PT UBC

-0.21

Correlation Coefficient

Citigroup  PT UBC

Very good diversification

The 3 months correlation between Citigroup and LABS is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and PT UBC Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT UBC Medical 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 PT UBC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT UBC Medical has no effect on the direction of Citigroup i.e., Citigroup and PT UBC go up and down completely randomly.

Pair Corralation between Citigroup and PT UBC

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.23 times more return on investment than PT UBC. However, Citigroup is 1.23 times more volatile than PT UBC Medical. It trades about 0.05 of its potential returns per unit of risk. PT UBC Medical is currently generating about -0.16 per unit of risk. If you would invest  7,086  in Citigroup on December 26, 2024 and sell it today you would earn a total of  361.00  from holding Citigroup or generate 5.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.67%
Values	Daily Returns

Citigroup  vs.  PT UBC Medical

Citigroup

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Citigroup may actually be approaching a critical reversion point that can send shares even higher in April 2025.

PT UBC Medical

Risk-Adjusted Performance

Very Weak

Over the last 90 days PT UBC Medical has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Citigroup and PT UBC

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

The idea behind Citigroup and PT UBC Medical 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.

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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.