Correlation Between Citigroup and Fujian Newland
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By analyzing existing cross correlation between Citigroup and Fujian Newland Computer, you can compare the effects of market volatilities on Citigroup and Fujian Newland 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 Fujian Newland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Fujian Newland.
Diversification Opportunities for Citigroup and Fujian Newland
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and Fujian is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Fujian Newland Computer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujian Newland Computer 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 Fujian Newland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujian Newland Computer has no effect on the direction of Citigroup i.e., Citigroup and Fujian Newland go up and down completely randomly.
Pair Corralation between Citigroup and Fujian Newland
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.57 times more return on investment than Fujian Newland. However, Citigroup is 1.74 times less risky than Fujian Newland. It trades about 0.21 of its potential returns per unit of risk. Fujian Newland Computer is currently generating about 0.12 per unit of risk. If you would invest 6,360 in Citigroup on August 28, 2024 and sell it today you would earn a total of 615.00 from holding Citigroup or generate 9.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Fujian Newland Computer
Performance |
| Timeline |
| Citigroup |
| Fujian Newland Computer |
Citigroup and Fujian Newland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Fujian Newland
The main advantage of trading using opposite Citigroup and Fujian Newland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Fujian Newland 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 Fujian Newland will offset losses from the drop in Fujian Newland's long position.The idea behind Citigroup and Fujian Newland Computer 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.| Fujian Newland vs. Agricultural Bank of | Fujian Newland vs. Industrial and Commercial | Fujian Newland vs. Bank of China | Fujian Newland vs. PetroChina Co Ltd |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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