Correlation Between Citigroup and YG Entertainment
Can any of the company-specific risk be diversified away by investing in both Citigroup and YG Entertainment 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 YG Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and YG Entertainment, you can compare the effects of market volatilities on Citigroup and YG Entertainment 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 YG Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and YG Entertainment.
Diversification Opportunities for Citigroup and YG Entertainment
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and 122870 is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and YG Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YG Entertainment 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 YG Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YG Entertainment has no effect on the direction of Citigroup i.e., Citigroup and YG Entertainment go up and down completely randomly.
Pair Corralation between Citigroup and YG Entertainment
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.51 times more return on investment than YG Entertainment. However, Citigroup is 1.97 times less risky than YG Entertainment. It trades about 0.09 of its potential returns per unit of risk. YG Entertainment is currently generating about 0.01 per unit of risk. If you would invest 4,300 in Citigroup on November 28, 2024 and sell it today you would earn a total of 3,665 from holding Citigroup or generate 85.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.62% |
| Values | Daily Returns |
Citigroup vs. YG Entertainment
Performance |
| Timeline |
| Citigroup |
| YG Entertainment |
Citigroup and YG Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and YG Entertainment
The main advantage of trading using opposite Citigroup and YG Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, YG Entertainment 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 YG Entertainment will offset losses from the drop in YG Entertainment's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| YG Entertainment vs. JYP Entertainment | YG Entertainment vs. SM Entertainment Co | YG Entertainment vs. Cube Entertainment | YG Entertainment vs. FNC Entertainment Co |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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