Correlation Between Citigroup and Kwong Fong
Can any of the company-specific risk be diversified away by investing in both Citigroup and Kwong Fong 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 Kwong Fong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Kwong Fong Industries, you can compare the effects of market volatilities on Citigroup and Kwong Fong 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 Kwong Fong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Kwong Fong.
Diversification Opportunities for Citigroup and Kwong Fong
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Citigroup and Kwong is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Kwong Fong Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kwong Fong Industries 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 Kwong Fong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kwong Fong Industries has no effect on the direction of Citigroup i.e., Citigroup and Kwong Fong go up and down completely randomly.
Pair Corralation between Citigroup and Kwong Fong
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.4 times more return on investment than Kwong Fong. However, Citigroup is 1.4 times more volatile than Kwong Fong Industries. It trades about 0.21 of its potential returns per unit of risk. Kwong Fong Industries is currently generating about -0.19 per unit of risk. If you would invest 6,393 in Citigroup on August 31, 2024 and sell it today you would earn a total of 623.00 from holding Citigroup or generate 9.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Kwong Fong Industries
Performance |
| Timeline |
| Citigroup |
| Kwong Fong Industries |
Citigroup and Kwong Fong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Kwong Fong
The main advantage of trading using opposite Citigroup and Kwong Fong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Kwong Fong 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 Kwong Fong will offset losses from the drop in Kwong Fong's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Kwong Fong vs. Chaintech Technology Corp | Kwong Fong vs. AVerMedia Technologies | Kwong Fong vs. Avision | Kwong Fong vs. Clevo 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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