Correlation Between Citigroup and Mobile Appliance
Can any of the company-specific risk be diversified away by investing in both Citigroup and Mobile Appliance 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 Mobile Appliance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Mobile Appliance, you can compare the effects of market volatilities on Citigroup and Mobile Appliance 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 Mobile Appliance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Mobile Appliance.
Diversification Opportunities for Citigroup and Mobile Appliance
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Mobile is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Mobile Appliance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mobile Appliance 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 Mobile Appliance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mobile Appliance has no effect on the direction of Citigroup i.e., Citigroup and Mobile Appliance go up and down completely randomly.
Pair Corralation between Citigroup and Mobile Appliance
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.58 times more return on investment than Mobile Appliance. However, Citigroup is 1.72 times less risky than Mobile Appliance. It trades about 0.26 of its potential returns per unit of risk. Mobile Appliance is currently generating about 0.04 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 | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Citigroup vs. Mobile Appliance
Performance |
| Timeline |
| Citigroup |
| Mobile Appliance |
Citigroup and Mobile Appliance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Mobile Appliance
The main advantage of trading using opposite Citigroup and Mobile Appliance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Mobile Appliance 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 Mobile Appliance will offset losses from the drop in Mobile Appliance's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Mobile Appliance vs. Hankook Steel Co | Mobile Appliance vs. Histeel | Mobile Appliance vs. Ni Steel | Mobile Appliance vs. Daechang Steel 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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