Correlation Between Citigroup and China Merchants
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By analyzing existing cross correlation between Citigroup and China Merchants Bank, you can compare the effects of market volatilities on Citigroup and China Merchants 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 China Merchants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and China Merchants.
Diversification Opportunities for Citigroup and China Merchants
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citigroup and China is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and China Merchants Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Merchants Bank 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 China Merchants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Merchants Bank has no effect on the direction of Citigroup i.e., Citigroup and China Merchants go up and down completely randomly.
Pair Corralation between Citigroup and China Merchants
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.57 times more return on investment than China Merchants. However, Citigroup is 1.57 times more volatile than China Merchants Bank. It trades about 0.21 of its potential returns per unit of risk. China Merchants Bank is currently generating about -0.12 per unit of risk. If you would invest 6,393 in Citigroup on August 31, 2024 and sell it today you would earn a total of 623.00 from holding Citigroup or generate 9.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. China Merchants Bank
Performance |
| Timeline |
| Citigroup |
| China Merchants Bank |
Citigroup and China Merchants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and China Merchants
The main advantage of trading using opposite Citigroup and China Merchants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, China Merchants 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 China Merchants will offset losses from the drop in China Merchants' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| China Merchants vs. Marssenger Kitchenware Co | China Merchants vs. Maccura Biotechnology Co | China Merchants vs. Shanghai Rightongene Biotechnology | China Merchants vs. Fujian Longzhou Transportation |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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