Correlation Between Neto ME and Citigroup
Can any of the company-specific risk be diversified away by investing in both Neto ME 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 Neto ME and Citigroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Neto ME Holdings and Citigroup, you can compare the effects of market volatilities on Neto ME 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 Neto ME with a short position of Citigroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neto ME and Citigroup.
Diversification Opportunities for Neto ME and Citigroup
Very weak diversification
The 3 months correlation between Neto and Citigroup is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Neto ME Holdings and Citigroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citigroup and Neto ME 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 Neto ME Holdings 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 Neto ME i.e., Neto ME and Citigroup go up and down completely randomly.
Pair Corralation between Neto ME and Citigroup
Assuming the 90 days trading horizon Neto ME Holdings is expected to under-perform the Citigroup. In addition to that, Neto ME is 1.35 times more volatile than Citigroup. It trades about -0.11 of its total potential returns per unit of risk. Citigroup is currently generating about 0.04 per unit of volatility. If you would invest 4,784 in Citigroup on January 26, 2024 and sell it today you would earn a total of 1,463 from holding Citigroup or generate 30.58% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 78.95% |
Values | Daily Returns |
Neto ME Holdings vs. Citigroup
Performance |
Timeline |
Neto ME Holdings |
Citigroup |
Neto ME and Citigroup Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Neto ME and Citigroup
The main advantage of trading using opposite Neto ME and Citigroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neto ME 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.Neto ME vs. Bezeq Israeli Telecommunication | Neto ME vs. Bank Hapoalim | Neto ME vs. Bank Leumi Le Israel | Neto ME vs. Israel Discount Bank |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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