Correlation Between Citigroup and KCC Engineering
Can any of the company-specific risk be diversified away by investing in both Citigroup and KCC Engineering 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 KCC Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and KCC Engineering Construction, you can compare the effects of market volatilities on Citigroup and KCC Engineering 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 KCC Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and KCC Engineering.
Diversification Opportunities for Citigroup and KCC Engineering
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and KCC is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and KCC Engineering Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KCC Engineering Cons 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 KCC Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KCC Engineering Cons has no effect on the direction of Citigroup i.e., Citigroup and KCC Engineering go up and down completely randomly.
Pair Corralation between Citigroup and KCC Engineering
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.48 times more return on investment than KCC Engineering. However, Citigroup is 2.1 times less risky than KCC Engineering. It trades about 0.25 of its potential returns per unit of risk. KCC Engineering Construction is currently generating about 0.04 per unit of risk. If you would invest 6,815 in Citigroup on September 15, 2024 and sell it today you would earn a total of 286.00 from holding Citigroup or generate 4.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Citigroup vs. KCC Engineering Construction
Performance |
| Timeline |
| Citigroup |
| KCC Engineering Cons |
Citigroup and KCC Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and KCC Engineering
The main advantage of trading using opposite Citigroup and KCC Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, KCC Engineering 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 KCC Engineering will offset losses from the drop in KCC Engineering's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| KCC Engineering vs. Korea New Network | KCC Engineering vs. Solution Advanced Technology | KCC Engineering vs. Busan Industrial Co | KCC Engineering vs. Busan Ind |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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