Correlation Between Citigroup and GUOTAI JUNAN
Can any of the company-specific risk be diversified away by investing in both Citigroup and GUOTAI JUNAN 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 GUOTAI JUNAN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and GUOTAI JUNAN SEC, you can compare the effects of market volatilities on Citigroup and GUOTAI JUNAN 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 GUOTAI JUNAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and GUOTAI JUNAN.
Diversification Opportunities for Citigroup and GUOTAI JUNAN
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and GUOTAI is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and GUOTAI JUNAN SEC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GUOTAI JUNAN SEC 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 GUOTAI JUNAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GUOTAI JUNAN SEC has no effect on the direction of Citigroup i.e., Citigroup and GUOTAI JUNAN go up and down completely randomly.
Pair Corralation between Citigroup and GUOTAI JUNAN
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.78 times more return on investment than GUOTAI JUNAN. However, Citigroup is 1.28 times less risky than GUOTAI JUNAN. It trades about 0.27 of its potential returns per unit of risk. GUOTAI JUNAN SEC is currently generating about 0.08 per unit of risk. If you would invest 6,315 in Citigroup on September 2, 2024 and sell it today you would earn a total of 772.00 from holding Citigroup or generate 12.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Citigroup vs. GUOTAI JUNAN SEC
Performance |
| Timeline |
| Citigroup |
| GUOTAI JUNAN SEC |
Citigroup and GUOTAI JUNAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and GUOTAI JUNAN
The main advantage of trading using opposite Citigroup and GUOTAI JUNAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, GUOTAI JUNAN 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 GUOTAI JUNAN will offset losses from the drop in GUOTAI JUNAN's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| GUOTAI JUNAN vs. Morgan Stanley | GUOTAI JUNAN vs. The Goldman Sachs | GUOTAI JUNAN vs. Superior Plus Corp | GUOTAI JUNAN vs. NMI 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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