Correlation Between Citigroup and Dongwoon Anatech
Can any of the company-specific risk be diversified away by investing in both Citigroup and Dongwoon Anatech 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 Dongwoon Anatech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Dongwoon Anatech Co, you can compare the effects of market volatilities on Citigroup and Dongwoon Anatech 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 Dongwoon Anatech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Dongwoon Anatech.
Diversification Opportunities for Citigroup and Dongwoon Anatech
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Citigroup and Dongwoon is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Dongwoon Anatech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongwoon Anatech 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 Dongwoon Anatech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongwoon Anatech has no effect on the direction of Citigroup i.e., Citigroup and Dongwoon Anatech go up and down completely randomly.
Pair Corralation between Citigroup and Dongwoon Anatech
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.93 times less return on investment than Dongwoon Anatech. But when comparing it to its historical volatility, Citigroup is 2.83 times less risky than Dongwoon Anatech. It trades about 0.14 of its potential returns per unit of risk. Dongwoon Anatech Co is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,665,913 in Dongwoon Anatech Co on October 16, 2024 and sell it today you would earn a total of 201,087 from holding Dongwoon Anatech Co or generate 12.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.5% |
| Values | Daily Returns |
Citigroup vs. Dongwoon Anatech Co
Performance |
| Timeline |
| Citigroup |
| Dongwoon Anatech |
Citigroup and Dongwoon Anatech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Dongwoon Anatech
The main advantage of trading using opposite Citigroup and Dongwoon Anatech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Dongwoon Anatech 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 Dongwoon Anatech will offset losses from the drop in Dongwoon Anatech's long position.| Citigroup vs. Nu Holdings | Citigroup vs. Canadian Imperial Bank | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
| Dongwoon Anatech vs. SK Hynix | Dongwoon Anatech vs. LX Semicon Co | Dongwoon Anatech vs. Tokai Carbon Korea | Dongwoon Anatech vs. People Technology |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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