Correlation Between Citigroup and Hanjinkal
Can any of the company-specific risk be diversified away by investing in both Citigroup and Hanjinkal 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 Hanjinkal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Hanjinkal, you can compare the effects of market volatilities on Citigroup and Hanjinkal 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 Hanjinkal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Hanjinkal.
Diversification Opportunities for Citigroup and Hanjinkal
Modest diversification
The 3 months correlation between Citigroup and Hanjinkal is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Hanjinkal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanjinkal 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 Hanjinkal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanjinkal has no effect on the direction of Citigroup i.e., Citigroup and Hanjinkal go up and down completely randomly.
Pair Corralation between Citigroup and Hanjinkal
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.81 times less return on investment than Hanjinkal. But when comparing it to its historical volatility, Citigroup is 1.64 times less risky than Hanjinkal. It trades about 0.07 of its potential returns per unit of risk. Hanjinkal is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 6,370,000 in Hanjinkal on August 29, 2024 and sell it today you would earn a total of 1,560,000 from holding Hanjinkal or generate 24.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 96.03% |
| Values | Daily Returns |
Citigroup vs. Hanjinkal
Performance |
| Timeline |
| Citigroup |
| Hanjinkal |
Citigroup and Hanjinkal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Hanjinkal
The main advantage of trading using opposite Citigroup and Hanjinkal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Hanjinkal 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 Hanjinkal will offset losses from the drop in Hanjinkal's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Hanjinkal vs. Korean Drug Co | Hanjinkal vs. Shinsegae Information Communication | Hanjinkal vs. CU Medical Systems | Hanjinkal vs. Inzi Display CoLtd |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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