Correlation Between Citigroup and Hyundai Industrial
Can any of the company-specific risk be diversified away by investing in both Citigroup and Hyundai Industrial 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 Hyundai Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Hyundai Industrial Co, you can compare the effects of market volatilities on Citigroup and Hyundai Industrial 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 Hyundai Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Hyundai Industrial.
Diversification Opportunities for Citigroup and Hyundai Industrial
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citigroup and Hyundai is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Hyundai Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Industrial 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 Hyundai Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Industrial has no effect on the direction of Citigroup i.e., Citigroup and Hyundai Industrial go up and down completely randomly.
Pair Corralation between Citigroup and Hyundai Industrial
Taking into account the 90-day investment horizon Citigroup is expected to under-perform the Hyundai Industrial. But the stock apears to be less risky and, when comparing its historical volatility, Citigroup is 2.26 times less risky than Hyundai Industrial. The stock trades about -0.02 of its potential returns per unit of risk. The Hyundai Industrial Co is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 502,000 in Hyundai Industrial Co on November 27, 2024 and sell it today you would earn a total of 104,000 from holding Hyundai Industrial Co or generate 20.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 85.0% |
| Values | Daily Returns |
Citigroup vs. Hyundai Industrial Co
Performance |
| Timeline |
| Citigroup |
| Hyundai Industrial |
Citigroup and Hyundai Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Hyundai Industrial
The main advantage of trading using opposite Citigroup and Hyundai Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Hyundai Industrial 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 Hyundai Industrial will offset losses from the drop in Hyundai Industrial's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Hyundai Industrial vs. Kukil Metal Co | Hyundai Industrial vs. Ssangyong Materials Corp | Hyundai Industrial vs. Daejung Chemicals Metals | Hyundai Industrial vs. Seoyon Topmetal 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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