Correlation Between Citigroup and GANGLONG CHINA
Can any of the company-specific risk be diversified away by investing in both Citigroup and GANGLONG CHINA 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 GANGLONG CHINA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and GANGLONG CHINA PRGRLTD, you can compare the effects of market volatilities on Citigroup and GANGLONG CHINA 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 GANGLONG CHINA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and GANGLONG CHINA.
Diversification Opportunities for Citigroup and GANGLONG CHINA
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and GANGLONG is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and GANGLONG CHINA PRGRLTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GANGLONG CHINA PRGRLTD 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 GANGLONG CHINA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GANGLONG CHINA PRGRLTD has no effect on the direction of Citigroup i.e., Citigroup and GANGLONG CHINA go up and down completely randomly.
Pair Corralation between Citigroup and GANGLONG CHINA
Taking into account the 90-day investment horizon Citigroup is expected to generate 52.66 times less return on investment than GANGLONG CHINA. But when comparing it to its historical volatility, Citigroup is 41.58 times less risky than GANGLONG CHINA. It trades about 0.06 of its potential returns per unit of risk. GANGLONG CHINA PRGRLTD is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 6.40 in GANGLONG CHINA PRGRLTD on October 14, 2024 and sell it today you would lose (5.60) from holding GANGLONG CHINA PRGRLTD or give up 87.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.8% |
| Values | Daily Returns |
Citigroup vs. GANGLONG CHINA PRGRLTD
Performance |
| Timeline |
| Citigroup |
| GANGLONG CHINA PRGRLTD |
Citigroup and GANGLONG CHINA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and GANGLONG CHINA
The main advantage of trading using opposite Citigroup and GANGLONG CHINA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, GANGLONG CHINA 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 GANGLONG CHINA will offset losses from the drop in GANGLONG CHINA's long position.| Citigroup vs. Nu Holdings | Citigroup vs. Canadian Imperial Bank | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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