Correlation Between Citigroup and Panasonic Corp
Can any of the company-specific risk be diversified away by investing in both Citigroup and Panasonic Corp 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 Panasonic Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Panasonic Corp, you can compare the effects of market volatilities on Citigroup and Panasonic Corp 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 Panasonic Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Panasonic Corp.
Diversification Opportunities for Citigroup and Panasonic Corp
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citigroup and Panasonic is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Panasonic Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Panasonic Corp 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 Panasonic Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Panasonic Corp has no effect on the direction of Citigroup i.e., Citigroup and Panasonic Corp go up and down completely randomly.
Pair Corralation between Citigroup and Panasonic Corp
Taking into account the 90-day investment horizon Citigroup is expected to generate 3.32 times less return on investment than Panasonic Corp. But when comparing it to its historical volatility, Citigroup is 1.44 times less risky than Panasonic Corp. It trades about 0.29 of its potential returns per unit of risk. Panasonic Corp is currently generating about 0.67 of returns per unit of risk over similar time horizon. If you would invest 124,450 in Panasonic Corp on August 26, 2024 and sell it today you would earn a total of 30,650 from holding Panasonic Corp or generate 24.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 50.0% |
| Values | Daily Returns |
Citigroup vs. Panasonic Corp
Performance |
| Timeline |
| Citigroup |
| Panasonic Corp |
Citigroup and Panasonic Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Panasonic Corp
The main advantage of trading using opposite Citigroup and Panasonic Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Panasonic Corp 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 Panasonic Corp will offset losses from the drop in Panasonic Corp's long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
| Panasonic Corp vs. Automatic Data Processing | Panasonic Corp vs. Medical Properties Trust | Panasonic Corp vs. Futura Medical | Panasonic Corp vs. Fresenius Medical Care |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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