Correlation Between Citizens and Credito Emiliano

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

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

Diversification Opportunities for Citizens and Credito Emiliano

-0.49

Correlation Coefficient

Citizens  Credito Emiliano

Very good diversification

The 3 months correlation between Citizens and Credito is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Citizens and Credito Emiliano SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credito Emiliano SpA and Citizens 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 Citizens are associated (or correlated) with Credito Emiliano. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Credito Emiliano SpA has no effect on the direction of Citizens i.e., Citizens and Credito Emiliano go up and down completely randomly.

Pair Corralation between Citizens and Credito Emiliano

If you would invest  319.00  in Citizens on June 30, 2024 and sell it today you would earn a total of  22.00  from holding Citizens or generate 6.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	4.76%
Values	Daily Returns

Citizens  vs.  Credito Emiliano SpA

Citizens

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citizens are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady forward indicators, Citizens sustained solid returns over the last few months and may actually be approaching a breakup point.

Credito Emiliano SpA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Credito Emiliano SpA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Credito Emiliano is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Citizens and Credito Emiliano

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

The idea behind Citizens and Credito Emiliano SpA 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.