Correlation Between Citigroup and Hanwha InvestmentSecuri
Can any of the company-specific risk be diversified away by investing in both Citigroup and Hanwha InvestmentSecuri 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 Citigroup and Hanwha InvestmentSecuri into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Hanwha InvestmentSecurities Co, you can compare the effects of market volatilities on Citigroup and Hanwha InvestmentSecuri 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 Hanwha InvestmentSecuri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Hanwha InvestmentSecuri.
Diversification Opportunities for Citigroup and Hanwha InvestmentSecuri
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Hanwha is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Hanwha InvestmentSecurities Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanwha InvestmentSecuri 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 Hanwha InvestmentSecuri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanwha InvestmentSecuri has no effect on the direction of Citigroup i.e., Citigroup and Hanwha InvestmentSecuri go up and down completely randomly.
Pair Corralation between Citigroup and Hanwha InvestmentSecuri
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.56 times less return on investment than Hanwha InvestmentSecuri. But when comparing it to its historical volatility, Citigroup is 3.33 times less risky than Hanwha InvestmentSecuri. It trades about 0.24 of its potential returns per unit of risk. Hanwha InvestmentSecurities Co is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 674,000 in Hanwha InvestmentSecurities Co on August 25, 2024 and sell it today you would earn a total of 92,000 from holding Hanwha InvestmentSecurities Co or generate 13.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Hanwha InvestmentSecurities Co
Performance |
| Timeline |
| Citigroup |
| Hanwha InvestmentSecuri |
Citigroup and Hanwha InvestmentSecuri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Hanwha InvestmentSecuri
The main advantage of trading using opposite Citigroup and Hanwha InvestmentSecuri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Hanwha InvestmentSecuri 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 Hanwha InvestmentSecuri will offset losses from the drop in Hanwha InvestmentSecuri'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 Stocks Directory module to find actively traded stocks across global markets.
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