Correlation Between Citigroup and Far Eastern
Can any of the company-specific risk be diversified away by investing in both Citigroup and Far Eastern 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 Far Eastern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Far Eastern New, you can compare the effects of market volatilities on Citigroup and Far Eastern 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 Far Eastern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Far Eastern.
Diversification Opportunities for Citigroup and Far Eastern
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Citigroup and Far is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Far Eastern New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Far Eastern New 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 Far Eastern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Far Eastern New has no effect on the direction of Citigroup i.e., Citigroup and Far Eastern go up and down completely randomly.
Pair Corralation between Citigroup and Far Eastern
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.24 times more return on investment than Far Eastern. However, Citigroup is 1.24 times more volatile than Far Eastern New. It trades about 0.07 of its potential returns per unit of risk. Far Eastern New is currently generating about 0.02 per unit of risk. If you would invest 4,134 in Citigroup on August 30, 2024 and sell it today you would earn a total of 2,882 from holding Citigroup or generate 69.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.77% |
| Values | Daily Returns |
Citigroup vs. Far Eastern New
Performance |
| Timeline |
| Citigroup |
| Far Eastern New |
Citigroup and Far Eastern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Far Eastern
The main advantage of trading using opposite Citigroup and Far Eastern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Far Eastern 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 Far Eastern will offset losses from the drop in Far Eastern's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Far Eastern vs. Yulon Motor Co | Far Eastern vs. Far Eastern Department | Far Eastern vs. China Steel Corp | Far Eastern vs. Chang Hwa Commercial |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |