Correlation Between Citigroup and Hung Chou
Can any of the company-specific risk be diversified away by investing in both Citigroup and Hung Chou 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 Hung Chou into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Hung Chou Fiber, you can compare the effects of market volatilities on Citigroup and Hung Chou 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 Hung Chou. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Hung Chou.
Diversification Opportunities for Citigroup and Hung Chou
Significant diversification
The 3 months correlation between Citigroup and Hung is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Hung Chou Fiber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hung Chou Fiber 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 Hung Chou. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hung Chou Fiber has no effect on the direction of Citigroup i.e., Citigroup and Hung Chou go up and down completely randomly.
Pair Corralation between Citigroup and Hung Chou
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.21 times more return on investment than Hung Chou. However, Citigroup is 1.21 times more volatile than Hung Chou Fiber. It trades about 0.07 of its potential returns per unit of risk. Hung Chou Fiber is currently generating about 0.03 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 Together |
| Strength | Insignificant |
| Accuracy | 96.77% |
| Values | Daily Returns |
Citigroup vs. Hung Chou Fiber
Performance |
| Timeline |
| Citigroup |
| Hung Chou Fiber |
Citigroup and Hung Chou Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Hung Chou
The main advantage of trading using opposite Citigroup and Hung Chou positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Hung Chou 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 Hung Chou will offset losses from the drop in Hung Chou's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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 Directory module to find actively traded commodities issued by global exchanges.
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