Correlation Between Citigroup and North Huajin
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By analyzing existing cross correlation between Citigroup and North Huajin Chemical, you can compare the effects of market volatilities on Citigroup and North Huajin 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 Citigroup with a short position of North Huajin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and North Huajin.
Diversification Opportunities for Citigroup and North Huajin
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and North is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and North Huajin Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on North Huajin Chemical and Citigroup 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 Citigroup are associated (or correlated) with North Huajin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of North Huajin Chemical has no effect on the direction of Citigroup i.e., Citigroup and North Huajin go up and down completely randomly.
Pair Corralation between Citigroup and North Huajin
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.15 times more return on investment than North Huajin. However, Citigroup is 1.15 times more volatile than North Huajin Chemical. It trades about 0.41 of its potential returns per unit of risk. North Huajin Chemical is currently generating about -0.3 per unit of risk. If you would invest 6,977 in Citigroup on October 24, 2024 and sell it today you would earn a total of 1,022 from holding Citigroup or generate 14.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 85.71% |
| Values | Daily Returns |
Citigroup vs. North Huajin Chemical
Performance |
| Timeline |
| Citigroup |
| North Huajin Chemical |
Citigroup and North Huajin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and North Huajin
The main advantage of trading using opposite Citigroup and North Huajin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, North Huajin 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 North Huajin will offset losses from the drop in North Huajin's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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