Correlation Between Citigroup and AU Optronics
Can any of the company-specific risk be diversified away by investing in both Citigroup and AU Optronics 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 AU Optronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and AU Optronics, you can compare the effects of market volatilities on Citigroup and AU Optronics 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 AU Optronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and AU Optronics.
Diversification Opportunities for Citigroup and AU Optronics
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Citigroup and 2409 is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and AU Optronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AU Optronics 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 AU Optronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AU Optronics has no effect on the direction of Citigroup i.e., Citigroup and AU Optronics go up and down completely randomly.
Pair Corralation between Citigroup and AU Optronics
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.23 times more return on investment than AU Optronics. However, Citigroup is 1.23 times more volatile than AU Optronics. It trades about 0.29 of its potential returns per unit of risk. AU Optronics is currently generating about -0.23 per unit of risk. If you would invest 6,122 in Citigroup on August 26, 2024 and sell it today you would earn a total of 862.00 from holding Citigroup or generate 14.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. AU Optronics
Performance |
| Timeline |
| Citigroup |
| AU Optronics |
Citigroup and AU Optronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and AU Optronics
The main advantage of trading using opposite Citigroup and AU Optronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, AU Optronics 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 AU Optronics will offset losses from the drop in AU Optronics' long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
| AU Optronics vs. Innolux Corp | AU Optronics vs. United Microelectronics | AU Optronics vs. China Steel Corp | AU Optronics vs. Quanta Computer |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |