Correlation Between Citigroup and Sangsin Energy
Can any of the company-specific risk be diversified away by investing in both Citigroup and Sangsin Energy 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 Sangsin Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Sangsin Energy Display, you can compare the effects of market volatilities on Citigroup and Sangsin Energy 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 Sangsin Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Sangsin Energy.
Diversification Opportunities for Citigroup and Sangsin Energy
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and Sangsin is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Sangsin Energy Display in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sangsin Energy Display 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 Sangsin Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sangsin Energy Display has no effect on the direction of Citigroup i.e., Citigroup and Sangsin Energy go up and down completely randomly.
Pair Corralation between Citigroup and Sangsin Energy
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.87 times more return on investment than Sangsin Energy. However, Citigroup is 1.15 times less risky than Sangsin Energy. It trades about 0.14 of its potential returns per unit of risk. Sangsin Energy Display is currently generating about -0.37 per unit of risk. If you would invest 6,205 in Citigroup on August 29, 2024 and sell it today you would earn a total of 770.00 from holding Citigroup or generate 12.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 93.02% |
| Values | Daily Returns |
Citigroup vs. Sangsin Energy Display
Performance |
| Timeline |
| Citigroup |
| Sangsin Energy Display |
Citigroup and Sangsin Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Sangsin Energy
The main advantage of trading using opposite Citigroup and Sangsin Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Sangsin Energy 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 Sangsin Energy will offset losses from the drop in Sangsin Energy's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Sangsin Energy vs. Samsung Electronics Co | Sangsin Energy vs. Samsung Electronics Co | Sangsin Energy vs. KB Financial Group | Sangsin Energy vs. Shinhan Financial Group |
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