Correlation Between Citigroup and Nanya Technology
Can any of the company-specific risk be diversified away by investing in both Citigroup and Nanya Technology 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 Nanya Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Nanya Technology Corp, you can compare the effects of market volatilities on Citigroup and Nanya Technology 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 Nanya Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Nanya Technology.
Diversification Opportunities for Citigroup and Nanya Technology
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and Nanya is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Nanya Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanya Technology Corp 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 Nanya Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanya Technology Corp has no effect on the direction of Citigroup i.e., Citigroup and Nanya Technology go up and down completely randomly.
Pair Corralation between Citigroup and Nanya Technology
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.09 times more return on investment than Nanya Technology. However, Citigroup is 1.09 times more volatile than Nanya Technology Corp. It trades about 0.26 of its potential returns per unit of risk. Nanya Technology Corp is currently generating about -0.54 per unit of risk. If you would invest 6,361 in Citigroup on September 1, 2024 and sell it today you would earn a total of 726.00 from holding Citigroup or generate 11.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Citigroup vs. Nanya Technology Corp
Performance |
| Timeline |
| Citigroup |
| Nanya Technology Corp |
Citigroup and Nanya Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Nanya Technology
The main advantage of trading using opposite Citigroup and Nanya Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Nanya Technology 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 Nanya Technology will offset losses from the drop in Nanya Technology's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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