Correlation Between Citigroup and HUA YU

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Can any of the company-specific risk be diversified away by investing in both Citigroup and HUA YU 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 HUA YU into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and HUA YU LIEN, you can compare the effects of market volatilities on Citigroup and HUA YU 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 HUA YU. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and HUA YU.

Diversification Opportunities for Citigroup and HUA YU

-0.72
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Citigroup and HUA is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and HUA YU LIEN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUA YU LIEN 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 HUA YU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUA YU LIEN has no effect on the direction of Citigroup i.e., Citigroup and HUA YU go up and down completely randomly.

Pair Corralation between Citigroup and HUA YU

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.98 times more return on investment than HUA YU. However, Citigroup is 1.02 times less risky than HUA YU. It trades about 0.32 of its potential returns per unit of risk. HUA YU LIEN is currently generating about -0.14 per unit of risk. If you would invest  6,235  in Citigroup on September 5, 2024 and sell it today you would earn a total of  915.00  from holding Citigroup or generate 14.68% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy95.65%
ValuesDaily Returns

Citigroup  vs.  HUA YU LIEN

 Performance 
       Timeline  
Citigroup 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.
HUA YU LIEN 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days HUA YU LIEN has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Citigroup and HUA YU Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Citigroup and HUA YU

The main advantage of trading using opposite Citigroup and HUA YU positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, HUA YU 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 HUA YU will offset losses from the drop in HUA YU's long position.
The idea behind Citigroup and HUA YU LIEN pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.

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