Correlation Between Plaza Centers and Citigroup
Can any of the company-specific risk be diversified away by investing in both Plaza Centers 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 Plaza Centers and Citigroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plaza Centers NV and Citigroup, you can compare the effects of market volatilities on Plaza Centers 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 Plaza Centers with a short position of Citigroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plaza Centers and Citigroup.
Diversification Opportunities for Plaza Centers and Citigroup
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Plaza and Citigroup is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Plaza Centers NV and Citigroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citigroup and Plaza Centers 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 Plaza Centers NV 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 Plaza Centers i.e., Plaza Centers and Citigroup go up and down completely randomly.
Pair Corralation between Plaza Centers and Citigroup
Assuming the 90 days trading horizon Plaza Centers NV is expected to under-perform the Citigroup. In addition to that, Plaza Centers is 2.85 times more volatile than Citigroup. It trades about -0.24 of its total potential returns per unit of risk. Citigroup is currently generating about 0.05 per unit of volatility. If you would invest 6,166 in Citigroup on January 26, 2024 and sell it today you would earn a total of 81.00 from holding Citigroup or generate 1.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 76.19% |
| Values | Daily Returns |
Plaza Centers NV vs. Citigroup
Performance |
| Timeline |
| Plaza Centers NV |
| Citigroup |
Plaza Centers and Citigroup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plaza Centers and Citigroup
The main advantage of trading using opposite Plaza Centers and Citigroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plaza Centers 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.| Plaza Centers vs. Galileo Tech | Plaza Centers vs. Clal Biotechnology Industries | Plaza Centers vs. TAT Technologies | Plaza Centers vs. Spuntech |
| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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 AI Investment Finder module to use AI to screen and filter profitable investment opportunities.
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