Correlation Between Citigroup and JOYY INCSPADR20
Can any of the company-specific risk be diversified away by investing in both Citigroup and JOYY INCSPADR20 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 JOYY INCSPADR20 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and JOYY INCSPADR20 CLA, you can compare the effects of market volatilities on Citigroup and JOYY INCSPADR20 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 JOYY INCSPADR20. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and JOYY INCSPADR20.
Diversification Opportunities for Citigroup and JOYY INCSPADR20
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Citigroup and JOYY is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and JOYY INCSPADR20 CLA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JOYY INCSPADR20 CLA 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 JOYY INCSPADR20. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JOYY INCSPADR20 CLA has no effect on the direction of Citigroup i.e., Citigroup and JOYY INCSPADR20 go up and down completely randomly.
Pair Corralation between Citigroup and JOYY INCSPADR20
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.12 times more return on investment than JOYY INCSPADR20. However, Citigroup is 1.12 times more volatile than JOYY INCSPADR20 CLA. It trades about 0.21 of its potential returns per unit of risk. JOYY INCSPADR20 CLA is currently generating about 0.15 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. JOYY INCSPADR20 CLA
Performance |
| Timeline |
| Citigroup |
| JOYY INCSPADR20 CLA |
Citigroup and JOYY INCSPADR20 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and JOYY INCSPADR20
The main advantage of trading using opposite Citigroup and JOYY INCSPADR20 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, JOYY INCSPADR20 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 JOYY INCSPADR20 will offset losses from the drop in JOYY INCSPADR20's long position.| Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Royal Bank of | Citigroup vs. JPMorgan Chase Co |
| JOYY INCSPADR20 vs. Transport International Holdings | JOYY INCSPADR20 vs. Ebro Foods SA | JOYY INCSPADR20 vs. JD SPORTS FASH | JOYY INCSPADR20 vs. Astral Foods Limited |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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