Correlation Between Citigroup and Samsung Asset
Can any of the company-specific risk be diversified away by investing in both Citigroup and Samsung Asset 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 Samsung Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Samsung Asset Management, you can compare the effects of market volatilities on Citigroup and Samsung Asset 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 Samsung Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Samsung Asset.
Diversification Opportunities for Citigroup and Samsung Asset
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and Samsung is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Samsung Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Asset Management 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 Samsung Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Asset Management has no effect on the direction of Citigroup i.e., Citigroup and Samsung Asset go up and down completely randomly.
Pair Corralation between Citigroup and Samsung Asset
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.02 times less return on investment than Samsung Asset. In addition to that, Citigroup is 1.35 times more volatile than Samsung Asset Management. It trades about 0.07 of its total potential returns per unit of risk. Samsung Asset Management is currently generating about 0.1 per unit of volatility. If you would invest 947,263 in Samsung Asset Management on September 2, 2024 and sell it today you would earn a total of 690,737 from holding Samsung Asset Management or generate 72.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.58% |
| Values | Daily Returns |
Citigroup vs. Samsung Asset Management
Performance |
| Timeline |
| Citigroup |
| Samsung Asset Management |
Citigroup and Samsung Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Samsung Asset
The main advantage of trading using opposite Citigroup and Samsung Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Samsung Asset 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 Samsung Asset will offset losses from the drop in Samsung Asset's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Samsung Asset vs. Busan Industrial Co | Samsung Asset vs. Busan Ind | Samsung Asset vs. Mirae Asset Daewoo | Samsung Asset vs. Shinhan WTI Futures |
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 Stocks Directory module to find actively traded stocks across global markets.
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