Correlation Between Citigroup and Evergreen Marine
Can any of the company-specific risk be diversified away by investing in both Citigroup and Evergreen Marine 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 Evergreen Marine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Evergreen Marine Corp, you can compare the effects of market volatilities on Citigroup and Evergreen Marine 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 Evergreen Marine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Evergreen Marine.
Diversification Opportunities for Citigroup and Evergreen Marine
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and Evergreen is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Evergreen Marine Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evergreen Marine 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 Evergreen Marine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evergreen Marine Corp has no effect on the direction of Citigroup i.e., Citigroup and Evergreen Marine go up and down completely randomly.
Pair Corralation between Citigroup and Evergreen Marine
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.31 times less return on investment than Evergreen Marine. But when comparing it to its historical volatility, Citigroup is 1.62 times less risky than Evergreen Marine. It trades about 0.12 of its potential returns per unit of risk. Evergreen Marine Corp is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 10,750 in Evergreen Marine Corp on August 29, 2024 and sell it today you would earn a total of 10,650 from holding Evergreen Marine Corp or generate 99.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.76% |
| Values | Daily Returns |
Citigroup vs. Evergreen Marine Corp
Performance |
| Timeline |
| Citigroup |
| Evergreen Marine Corp |
Citigroup and Evergreen Marine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Evergreen Marine
The main advantage of trading using opposite Citigroup and Evergreen Marine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Evergreen Marine 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 Evergreen Marine will offset losses from the drop in Evergreen Marine's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Evergreen Marine vs. Yulon Motor Co | Evergreen Marine vs. Far Eastern Department | Evergreen Marine vs. China Steel Corp | Evergreen Marine vs. Chang Hwa Commercial |
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 Managers module to screen money managers from public funds and ETFs managed around the world.
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