Correlation Between Utron and Citigroup
Can any of the company-specific risk be diversified away by investing in both Utron 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 Utron and Citigroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Utron and Citigroup, you can compare the effects of market volatilities on Utron 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 Utron with a short position of Citigroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Utron and Citigroup.
Diversification Opportunities for Utron and Citigroup
Very good diversification
The 3 months correlation between Utron and Citigroup is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Utron and Citigroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citigroup and Utron 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 Utron 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 Utron i.e., Utron and Citigroup go up and down completely randomly.
Pair Corralation between Utron and Citigroup
Assuming the 90 days trading horizon Utron is expected to generate 3.46 times more return on investment than Citigroup. However, Utron is 3.46 times more volatile than Citigroup. It trades about 0.43 of its potential returns per unit of risk. Citigroup is currently generating about 0.05 per unit of risk. If you would invest 29,200 in Utron on January 26, 2024 and sell it today you would earn a total of 13,000 from holding Utron or generate 44.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 76.19% |
| Values | Daily Returns |
Utron vs. Citigroup
Performance |
| Timeline |
| Utron |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| Citigroup |
Utron and Citigroup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Utron and Citigroup
The main advantage of trading using opposite Utron and Citigroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Utron 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 Utron 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.| Citigroup vs. Aquagold International | Citigroup vs. Thrivent High Yield | Citigroup vs. Morningstar Unconstrained Allocation | Citigroup vs. Via Renewables |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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