Correlation Between Citigroup and Investo Marketvector

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

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

Diversification Opportunities for Citigroup and Investo Marketvector

-0.08

Correlation Coefficient

Citigroup  Investo Marketvector

Good diversification

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

Pair Corralation between Citigroup and Investo Marketvector

Taking into account the 90-day investment horizon Citigroup is expected to generate 6.09 times less return on investment than Investo Marketvector. In addition to that, Citigroup is 1.22 times more volatile than Investo Marketvector Brazil. It trades about 0.01 of its total potential returns per unit of risk. Investo Marketvector Brazil is currently generating about 0.11 per unit of volatility. If you would invest  7,237  in Investo Marketvector Brazil on December 30, 2024 and sell it today you would earn a total of  784.00  from holding Investo Marketvector Brazil or generate 10.83% return on investment over 90 days.

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

Citigroup  vs.  Investo Marketvector Brazil

Citigroup

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Citigroup is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Investo Marketvector

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Investo Marketvector Brazil are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Investo Marketvector may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Citigroup and Investo Marketvector

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

The idea behind Citigroup and Investo Marketvector Brazil 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..