Correlation Between Citigroup and China Petrochemical
Can any of the company-specific risk be diversified away by investing in both Citigroup and China Petrochemical 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 China Petrochemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and China Petrochemical Development, you can compare the effects of market volatilities on Citigroup and China Petrochemical 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 China Petrochemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and China Petrochemical.
Diversification Opportunities for Citigroup and China Petrochemical
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and China is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and China Petrochemical Developmen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Petrochemical 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 China Petrochemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Petrochemical has no effect on the direction of Citigroup i.e., Citigroup and China Petrochemical go up and down completely randomly.
Pair Corralation between Citigroup and China Petrochemical
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.17 times more return on investment than China Petrochemical. However, Citigroup is 1.17 times more volatile than China Petrochemical Development. It trades about 0.07 of its potential returns per unit of risk. China Petrochemical Development is currently generating about -0.03 per unit of risk. If you would invest 4,206 in Citigroup on August 25, 2024 and sell it today you would earn a total of 2,778 from holding Citigroup or generate 66.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 96.78% |
| Values | Daily Returns |
Citigroup vs. China Petrochemical Developmen
Performance |
| Timeline |
| Citigroup |
| China Petrochemical |
Citigroup and China Petrochemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and China Petrochemical
The main advantage of trading using opposite Citigroup and China Petrochemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, China Petrochemical 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 China Petrochemical will offset losses from the drop in China Petrochemical's long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
| China Petrochemical vs. USI Corp | China Petrochemical vs. Grand Pacific Petrochemical | China Petrochemical vs. Taiwan Styrene Monomer | China Petrochemical vs. China Steel Corp |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |