Correlation Between Citigroup and Papilon Savunma

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

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

Diversification Opportunities for Citigroup and Papilon Savunma

0.38

Correlation Coefficient

Citigroup  Papilon Savunma

Weak diversification

The 3 months correlation between Citigroup and Papilon is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Papilon Savunma Guvenlik in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Papilon Savunma Guvenlik 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 Papilon Savunma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Papilon Savunma Guvenlik has no effect on the direction of Citigroup i.e., Citigroup and Papilon Savunma go up and down completely randomly.

Pair Corralation between Citigroup and Papilon Savunma

Taking into account the 90-day investment horizon Citigroup is expected to generate 23.06 times less return on investment than Papilon Savunma. But when comparing it to its historical volatility, Citigroup is 1.41 times less risky than Papilon Savunma. It trades about 0.0 of its potential returns per unit of risk. Papilon Savunma Guvenlik is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,334  in Papilon Savunma Guvenlik on October 15, 2024 and sell it today you would earn a total of  23.00  from holding Papilon Savunma Guvenlik or generate 1.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	90.0%
Values	Daily Returns

Citigroup  vs.  Papilon Savunma Guvenlik

Citigroup

Risk-Adjusted Performance

11 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

Papilon Savunma Guvenlik

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Papilon Savunma Guvenlik are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain forward indicators, Papilon Savunma may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Citigroup and Papilon Savunma

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

The idea behind Citigroup and Papilon Savunma Guvenlik 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.