Correlation Between Citigroup and Hwangkum Steel
Can any of the company-specific risk be diversified away by investing in both Citigroup and Hwangkum Steel 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 Hwangkum Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Hwangkum Steel Technology, you can compare the effects of market volatilities on Citigroup and Hwangkum Steel 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 Hwangkum Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Hwangkum Steel.
Diversification Opportunities for Citigroup and Hwangkum Steel
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and Hwangkum is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Hwangkum Steel Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hwangkum Steel Technology 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 Hwangkum Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hwangkum Steel Technology has no effect on the direction of Citigroup i.e., Citigroup and Hwangkum Steel go up and down completely randomly.
Pair Corralation between Citigroup and Hwangkum Steel
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.82 times more return on investment than Hwangkum Steel. However, Citigroup is 1.82 times more volatile than Hwangkum Steel Technology. It trades about 0.26 of its potential returns per unit of risk. Hwangkum Steel Technology is currently generating about -0.09 per unit of risk. If you would invest 6,361 in Citigroup on September 1, 2024 and sell it today you would earn a total of 726.00 from holding Citigroup or generate 11.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Citigroup vs. Hwangkum Steel Technology
Performance |
| Timeline |
| Citigroup |
| Hwangkum Steel Technology |
Citigroup and Hwangkum Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Hwangkum Steel
The main advantage of trading using opposite Citigroup and Hwangkum Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Hwangkum Steel 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 Hwangkum Steel will offset losses from the drop in Hwangkum Steel'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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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