Correlation Between Citigroup and Yduqs Participaes

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

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

Diversification Opportunities for Citigroup and Yduqs Participaes

0.19

Correlation Coefficient

Citigroup  Yduqs Participaes

Average diversification

The 3 months correlation between Citigroup and Yduqs is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Yduqs Participaes SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yduqs Participaes 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 Yduqs Participaes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yduqs Participaes has no effect on the direction of Citigroup i.e., Citigroup and Yduqs Participaes go up and down completely randomly.

Pair Corralation between Citigroup and Yduqs Participaes

Taking into account the 90-day investment horizon Citigroup is expected to generate 21.4 times less return on investment than Yduqs Participaes. But when comparing it to its historical volatility, Citigroup is 1.73 times less risky than Yduqs Participaes. It trades about 0.01 of its potential returns per unit of risk. Yduqs Participaes SA is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  855.00  in Yduqs Participaes SA on December 29, 2024 and sell it today you would earn a total of  361.00  from holding Yduqs Participaes SA or generate 42.22% return on investment over 90 days.

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

Citigroup  vs.  Yduqs Participaes SA

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.

Yduqs Participaes

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Yduqs Participaes SA are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Yduqs Participaes unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and Yduqs Participaes

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

The idea behind Citigroup and Yduqs Participaes SA 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.