Correlation Between Citigroup and Merry Electronics
Can any of the company-specific risk be diversified away by investing in both Citigroup and Merry Electronics 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 Merry Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Merry Electronics Co, you can compare the effects of market volatilities on Citigroup and Merry Electronics 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 Merry Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Merry Electronics.
Diversification Opportunities for Citigroup and Merry Electronics
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and Merry is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Merry Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merry Electronics 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 Merry Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Merry Electronics has no effect on the direction of Citigroup i.e., Citigroup and Merry Electronics go up and down completely randomly.
Pair Corralation between Citigroup and Merry Electronics
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.78 times more return on investment than Merry Electronics. However, Citigroup is 1.27 times less risky than Merry Electronics. It trades about 0.1 of its potential returns per unit of risk. Merry Electronics Co is currently generating about 0.04 per unit of risk. If you would invest 4,357 in Citigroup on August 26, 2024 and sell it today you would earn a total of 2,627 from holding Citigroup or generate 60.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.9% |
| Values | Daily Returns |
Citigroup vs. Merry Electronics Co
Performance |
| Timeline |
| Citigroup |
| Merry Electronics |
Citigroup and Merry Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Merry Electronics
The main advantage of trading using opposite Citigroup and Merry Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Merry Electronics 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 Merry Electronics will offset losses from the drop in Merry Electronics' long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
| Merry Electronics vs. Hunya Foods Co | Merry Electronics vs. Cathay Financial Holding | Merry Electronics vs. Asustek Computer | Merry Electronics vs. Taiwan Cooperative Financial |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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