Correlation Between Citigroup and Nara Mold
Can any of the company-specific risk be diversified away by investing in both Citigroup and Nara Mold 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 Nara Mold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Nara Mold Die, you can compare the effects of market volatilities on Citigroup and Nara Mold 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 Nara Mold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Nara Mold.
Diversification Opportunities for Citigroup and Nara Mold
Significant diversification
The 3 months correlation between Citigroup and Nara is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Nara Mold Die in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nara Mold Die 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 Nara Mold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nara Mold Die has no effect on the direction of Citigroup i.e., Citigroup and Nara Mold go up and down completely randomly.
Pair Corralation between Citigroup and Nara Mold
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.52 times more return on investment than Nara Mold. However, Citigroup is 1.92 times less risky than Nara Mold. It trades about 0.21 of its potential returns per unit of risk. Nara Mold Die is currently generating about -0.23 per unit of risk. If you would invest 6,255 in Citigroup on August 24, 2024 and sell it today you would earn a total of 640.00 from holding Citigroup or generate 10.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Nara Mold Die
Performance |
| Timeline |
| Citigroup |
| Nara Mold Die |
Citigroup and Nara Mold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Nara Mold
The main advantage of trading using opposite Citigroup and Nara Mold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Nara Mold 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 Nara Mold will offset losses from the drop in Nara Mold's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Nara Mold vs. Youl Chon Chemical | Nara Mold vs. LG Chemicals | Nara Mold vs. Korea Information Communications | Nara Mold vs. Youngchang Chemical Co |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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