Correlation Between Citigroup and Masterwork Machinery
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By analyzing existing cross correlation between Citigroup and Masterwork Machinery, you can compare the effects of market volatilities on Citigroup and Masterwork Machinery 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 Masterwork Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Masterwork Machinery.
Diversification Opportunities for Citigroup and Masterwork Machinery
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and Masterwork is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Masterwork Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Masterwork Machinery 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 Masterwork Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Masterwork Machinery has no effect on the direction of Citigroup i.e., Citigroup and Masterwork Machinery go up and down completely randomly.
Pair Corralation between Citigroup and Masterwork Machinery
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.17 times less return on investment than Masterwork Machinery. But when comparing it to its historical volatility, Citigroup is 2.87 times less risky than Masterwork Machinery. It trades about 0.21 of its potential returns per unit of risk. Masterwork Machinery is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 563.00 in Masterwork Machinery on August 29, 2024 and sell it today you would earn a total of 46.00 from holding Masterwork Machinery or generate 8.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Masterwork Machinery
Performance |
| Timeline |
| Citigroup |
| Masterwork Machinery |
Citigroup and Masterwork Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Masterwork Machinery
The main advantage of trading using opposite Citigroup and Masterwork Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Masterwork Machinery 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 Masterwork Machinery will offset losses from the drop in Masterwork Machinery's long position.The idea behind Citigroup and Masterwork Machinery pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Masterwork Machinery vs. Biwin Storage Technology | Masterwork Machinery vs. PetroChina Co Ltd | Masterwork Machinery vs. Industrial and Commercial | Masterwork Machinery vs. China Construction Bank |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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