Correlation Between Globavend Holdings and Citigroup

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

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

Diversification Opportunities for Globavend Holdings and Citigroup

-0.7

Correlation Coefficient

Globavend Holdings  Citigroup

Excellent diversification

The 3 months correlation between Globavend and Citigroup is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Globavend Holdings Limited and Citigroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citigroup and Globavend Holdings 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 Globavend Holdings Limited 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 Globavend Holdings i.e., Globavend Holdings and Citigroup go up and down completely randomly.

Pair Corralation between Globavend Holdings and Citigroup

Considering the 90-day investment horizon Globavend Holdings Limited is expected to under-perform the Citigroup. In addition to that, Globavend Holdings is 4.82 times more volatile than Citigroup. It trades about -0.02 of its total potential returns per unit of risk. Citigroup is currently generating about 0.06 per unit of volatility. If you would invest  4,708  in Citigroup on October 11, 2024 and sell it today you would earn a total of  2,618  from holding Citigroup or generate 55.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	59.19%
Values	Daily Returns

Globavend Holdings Limited  vs.  Citigroup

Globavend Holdings

Risk-Adjusted Performance

1 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Globavend Holdings Limited are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Globavend Holdings is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Citigroup

Risk-Adjusted Performance

9 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Globavend Holdings and Citigroup

The main advantage of trading using opposite Globavend Holdings and Citigroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globavend Holdings 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 Globavend Holdings Limited 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.