Correlation Between Citigroup and Wuxi Xinhongye
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By analyzing existing cross correlation between Citigroup and Wuxi Xinhongye Wire, you can compare the effects of market volatilities on Citigroup and Wuxi Xinhongye 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 Wuxi Xinhongye. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Wuxi Xinhongye.
Diversification Opportunities for Citigroup and Wuxi Xinhongye
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citigroup and Wuxi is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Wuxi Xinhongye Wire in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wuxi Xinhongye Wire 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 Wuxi Xinhongye. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wuxi Xinhongye Wire has no effect on the direction of Citigroup i.e., Citigroup and Wuxi Xinhongye go up and down completely randomly.
Pair Corralation between Citigroup and Wuxi Xinhongye
Taking into account the 90-day investment horizon Citigroup is expected to under-perform the Wuxi Xinhongye. But the stock apears to be less risky and, when comparing its historical volatility, Citigroup is 2.1 times less risky than Wuxi Xinhongye. The stock trades about -0.04 of its potential returns per unit of risk. The Wuxi Xinhongye Wire is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 2,841 in Wuxi Xinhongye Wire on November 28, 2024 and sell it today you would earn a total of 430.00 from holding Wuxi Xinhongye Wire or generate 15.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 72.73% |
| Values | Daily Returns |
Citigroup vs. Wuxi Xinhongye Wire
Performance |
| Timeline |
| Citigroup |
| Wuxi Xinhongye Wire |
Citigroup and Wuxi Xinhongye Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Wuxi Xinhongye
The main advantage of trading using opposite Citigroup and Wuxi Xinhongye positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Wuxi Xinhongye 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 Wuxi Xinhongye will offset losses from the drop in Wuxi Xinhongye's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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