Correlation Between Citigroup and Aesapar Fundo

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

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

Diversification Opportunities for Citigroup and Aesapar Fundo

-0.9

Correlation Coefficient

Citigroup  Aesapar Fundo

Pay attention - limited upside

The 3 months correlation between Citigroup and Aesapar is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Aesapar Fundo de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aesapar Fundo de 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 Aesapar Fundo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aesapar Fundo de has no effect on the direction of Citigroup i.e., Citigroup and Aesapar Fundo go up and down completely randomly.

Pair Corralation between Citigroup and Aesapar Fundo

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.04 times more return on investment than Aesapar Fundo. However, Citigroup is 1.04 times more volatile than Aesapar Fundo de. It trades about 0.19 of its potential returns per unit of risk. Aesapar Fundo de is currently generating about -0.24 per unit of risk. If you would invest  5,788  in Citigroup on September 14, 2024 and sell it today you would earn a total of  1,408  from holding Citigroup or generate 24.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Citigroup  vs.  Aesapar Fundo de

Citigroup

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 14 (%) 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.

Aesapar Fundo de

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aesapar Fundo de has generated negative risk-adjusted returns adding no value to fund investors. Despite weak performance in the last few months, the Fund's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Citigroup and Aesapar Fundo

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

The idea behind Citigroup and Aesapar Fundo de 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.