Correlation Between Citigroup and Dongnan Electronics
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By analyzing existing cross correlation between Citigroup and Dongnan Electronics Co, you can compare the effects of market volatilities on Citigroup and Dongnan 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 Dongnan Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Dongnan Electronics.
Diversification Opportunities for Citigroup and Dongnan Electronics
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Dongnan is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Dongnan Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongnan 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 Dongnan Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongnan Electronics has no effect on the direction of Citigroup i.e., Citigroup and Dongnan Electronics go up and down completely randomly.
Pair Corralation between Citigroup and Dongnan Electronics
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.38 times more return on investment than Dongnan Electronics. However, Citigroup is 2.61 times less risky than Dongnan Electronics. It trades about 0.26 of its potential returns per unit of risk. Dongnan Electronics Co is currently generating about 0.07 per unit of risk. If you would invest 6,361 in Citigroup on September 1, 2024 and sell it today you would earn a total of 726.00 from holding Citigroup or generate 11.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Citigroup vs. Dongnan Electronics Co
Performance |
| Timeline |
| Citigroup |
| Dongnan Electronics |
Citigroup and Dongnan Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Dongnan Electronics
The main advantage of trading using opposite Citigroup and Dongnan Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Dongnan 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 Dongnan Electronics will offset losses from the drop in Dongnan Electronics' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Dongnan Electronics vs. Cultural Investment Holdings | Dongnan Electronics vs. Gome Telecom Equipment | Dongnan Electronics vs. Bus Online Co | Dongnan Electronics vs. Holitech Technology Co |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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