Correlation Between Citigroup and Zoomlion Heavy
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By analyzing existing cross correlation between Citigroup and Zoomlion Heavy Industry, you can compare the effects of market volatilities on Citigroup and Zoomlion Heavy 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 Zoomlion Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Zoomlion Heavy.
Diversification Opportunities for Citigroup and Zoomlion Heavy
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Citigroup and Zoomlion is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Zoomlion Heavy Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zoomlion Heavy Industry 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 Zoomlion Heavy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zoomlion Heavy Industry has no effect on the direction of Citigroup i.e., Citigroup and Zoomlion Heavy go up and down completely randomly.
Pair Corralation between Citigroup and Zoomlion Heavy
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.29 times less return on investment than Zoomlion Heavy. But when comparing it to its historical volatility, Citigroup is 1.14 times less risky than Zoomlion Heavy. It trades about 0.07 of its potential returns per unit of risk. Zoomlion Heavy Industry is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 688.00 in Zoomlion Heavy Industry on September 27, 2024 and sell it today you would earn a total of 31.00 from holding Zoomlion Heavy Industry or generate 4.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Citigroup vs. Zoomlion Heavy Industry
Performance |
| Timeline |
| Citigroup |
| Zoomlion Heavy Industry |
Citigroup and Zoomlion Heavy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Zoomlion Heavy
The main advantage of trading using opposite Citigroup and Zoomlion Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Zoomlion Heavy 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 Zoomlion Heavy will offset losses from the drop in Zoomlion Heavy's long position.The idea behind Citigroup and Zoomlion Heavy Industry 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.| Zoomlion Heavy vs. Industrial and Commercial | Zoomlion Heavy vs. Agricultural Bank of | Zoomlion Heavy vs. China Construction Bank | Zoomlion Heavy vs. Bank of China |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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