Correlation Between Banco Actinver and Citigroup

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

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

Diversification Opportunities for Banco Actinver and Citigroup

-0.19

Correlation Coefficient

Banco Actinver  Citigroup

Good diversification

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

Pair Corralation between Banco Actinver and Citigroup

Assuming the 90 days trading horizon Banco Actinver SA is expected to under-perform the Citigroup. But the stock apears to be less risky and, when comparing its historical volatility, Banco Actinver SA is 1.06 times less risky than Citigroup. The stock trades about -0.13 of its potential returns per unit of risk. The Citigroup is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  110,645  in Citigroup on September 12, 2024 and sell it today you would earn a total of  33,395  from holding Citigroup or generate 30.18% return on investment over 90 days.

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

Banco Actinver SA  vs.  Citigroup

Banco Actinver SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Banco Actinver SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic 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 company investors.

Citigroup

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak primary indicators, Citigroup showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Banco Actinver and Citigroup

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

The idea behind Banco Actinver SA and Citigroup 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.