Correlation Between Citigroup and Pan Ocean
Can any of the company-specific risk be diversified away by investing in both Citigroup and Pan Ocean 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 Pan Ocean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Pan Ocean Co, you can compare the effects of market volatilities on Citigroup and Pan Ocean 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 Pan Ocean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Pan Ocean.
Diversification Opportunities for Citigroup and Pan Ocean
Good diversification
The 3 months correlation between Citigroup and Pan is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Pan Ocean Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pan Ocean 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 Pan Ocean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pan Ocean has no effect on the direction of Citigroup i.e., Citigroup and Pan Ocean go up and down completely randomly.
Pair Corralation between Citigroup and Pan Ocean
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.35 times more return on investment than Pan Ocean. However, Citigroup is 1.35 times more volatile than Pan Ocean Co. It trades about 0.23 of its potential returns per unit of risk. Pan Ocean Co is currently generating about 0.13 per unit of risk. If you would invest 6,360 in Citigroup on August 27, 2024 and sell it today you would earn a total of 624.00 from holding Citigroup or generate 9.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Pan Ocean Co
Performance |
| Timeline |
| Citigroup |
| Pan Ocean |
Citigroup and Pan Ocean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Pan Ocean
The main advantage of trading using opposite Citigroup and Pan Ocean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Pan Ocean 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 Pan Ocean will offset losses from the drop in Pan Ocean's long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
| Pan Ocean vs. LG Household Healthcare | Pan Ocean vs. LG Household Healthcare | Pan Ocean vs. GS Retail Co | Pan Ocean vs. Aprogen Healthcare Games |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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