Correlation Between Citigroup and Fundo Investimento

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

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

Diversification Opportunities for Citigroup and Fundo Investimento

-0.82

Correlation Coefficient

Citigroup  Fundo Investimento

Pay attention - limited upside

The 3 months correlation between Citigroup and Fundo is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Fundo Investimento Imobiliario in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fundo Investimento 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 Fundo Investimento. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fundo Investimento has no effect on the direction of Citigroup i.e., Citigroup and Fundo Investimento go up and down completely randomly.

Pair Corralation between Citigroup and Fundo Investimento

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.03 times less return on investment than Fundo Investimento. In addition to that, Citigroup is 2.46 times more volatile than Fundo Investimento Imobiliario. It trades about 0.01 of its total potential returns per unit of risk. Fundo Investimento Imobiliario is currently generating about 0.04 per unit of volatility. If you would invest  8,497  in Fundo Investimento Imobiliario on December 30, 2024 and sell it today you would earn a total of  143.00  from holding Fundo Investimento Imobiliario or generate 1.68% return on investment over 90 days.

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

Citigroup  vs.  Fundo Investimento Imobiliario

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.

Fundo Investimento

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fundo Investimento Imobiliario are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong essential indicators, Fundo Investimento is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Citigroup and Fundo Investimento

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

The idea behind Citigroup and Fundo Investimento Imobiliario 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.

Check out your portfolio center.

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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.