Correlation Between Citigroup and Seojin Automotive
Can any of the company-specific risk be diversified away by investing in both Citigroup and Seojin Automotive 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 Seojin Automotive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Seojin Automotive CoLtd, you can compare the effects of market volatilities on Citigroup and Seojin Automotive 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 Seojin Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Seojin Automotive.
Diversification Opportunities for Citigroup and Seojin Automotive
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and Seojin is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Seojin Automotive CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seojin Automotive CoLtd 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 Seojin Automotive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seojin Automotive CoLtd has no effect on the direction of Citigroup i.e., Citigroup and Seojin Automotive go up and down completely randomly.
Pair Corralation between Citigroup and Seojin Automotive
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.71 times more return on investment than Seojin Automotive. However, Citigroup is 1.42 times less risky than Seojin Automotive. It trades about 0.11 of its potential returns per unit of risk. Seojin Automotive CoLtd is currently generating about -0.08 per unit of risk. If you would invest 4,642 in Citigroup on September 4, 2024 and sell it today you would earn a total of 2,497 from holding Citigroup or generate 53.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 96.76% |
| Values | Daily Returns |
Citigroup vs. Seojin Automotive CoLtd
Performance |
| Timeline |
| Citigroup |
| Seojin Automotive CoLtd |
Citigroup and Seojin Automotive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Seojin Automotive
The main advantage of trading using opposite Citigroup and Seojin Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Seojin Automotive 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 Seojin Automotive will offset losses from the drop in Seojin Automotive's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Seojin Automotive vs. Korea Real Estate | Seojin Automotive vs. Busan Industrial Co | Seojin Automotive vs. UNISEM Co | Seojin Automotive vs. RPBio Inc |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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