Correlation Between Citigroup and Makina Takim

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

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

Diversification Opportunities for Citigroup and Makina Takim

0.21

Correlation Coefficient

Citigroup  Makina Takim

Modest diversification

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

Pair Corralation between Citigroup and Makina Takim

Taking into account the 90-day investment horizon Citigroup is expected to generate 4.76 times less return on investment than Makina Takim. But when comparing it to its historical volatility, Citigroup is 2.44 times less risky than Makina Takim. It trades about 0.06 of its potential returns per unit of risk. Makina Takim Endustrisi is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  632.00  in Makina Takim Endustrisi on September 21, 2024 and sell it today you would earn a total of  42.00  from holding Makina Takim Endustrisi or generate 6.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.65%
Values	Daily Returns

Citigroup  vs.  Makina Takim Endustrisi

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 unfluctuating fundamental indicators, Citigroup may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Makina Takim Endustrisi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Makina Takim Endustrisi has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Makina Takim is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Citigroup and Makina Takim

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

The idea behind Citigroup and Makina Takim Endustrisi 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.