Correlation Between Citigroup and Powszechna Kasa

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

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

Diversification Opportunities for Citigroup and Powszechna Kasa

0.08

Correlation Coefficient

Citigroup  Powszechna Kasa

Significant diversification

The 3 months correlation between Citigroup and Powszechna is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Powszechna Kasa Oszczednosci in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Powszechna Kasa Oszc 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 Powszechna Kasa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Powszechna Kasa Oszc has no effect on the direction of Citigroup i.e., Citigroup and Powszechna Kasa go up and down completely randomly.

Pair Corralation between Citigroup and Powszechna Kasa

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.36 times more return on investment than Powszechna Kasa. However, Citigroup is 2.77 times less risky than Powszechna Kasa. It trades about 0.23 of its potential returns per unit of risk. Powszechna Kasa Oszczednosci is currently generating about 0.03 per unit of risk. If you would invest  6,255  in Citigroup on October 23, 2024 and sell it today you would earn a total of  1,744  from holding Citigroup or generate 27.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Citigroup  vs.  Powszechna Kasa Oszczednosci

Citigroup

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

Powszechna Kasa Oszc

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Powszechna Kasa Oszczednosci are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady forward-looking signals, Powszechna Kasa may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Citigroup and Powszechna Kasa

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

The idea behind Citigroup and Powszechna Kasa Oszczednosci 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.