Correlation Between Citigroup and Dalian Thermal
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By analyzing existing cross correlation between Citigroup and Dalian Thermal Power, you can compare the effects of market volatilities on Citigroup and Dalian Thermal 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 Dalian Thermal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Dalian Thermal.
Diversification Opportunities for Citigroup and Dalian Thermal
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Dalian is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Dalian Thermal Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dalian Thermal Power 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 Dalian Thermal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dalian Thermal Power has no effect on the direction of Citigroup i.e., Citigroup and Dalian Thermal go up and down completely randomly.
Pair Corralation between Citigroup and Dalian Thermal
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.51 times more return on investment than Dalian Thermal. However, Citigroup is 1.96 times less risky than Dalian Thermal. It trades about 0.26 of its potential returns per unit of risk. Dalian Thermal Power is currently generating about -0.01 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. Dalian Thermal Power
Performance |
| Timeline |
| Citigroup |
| Dalian Thermal Power |
Citigroup and Dalian Thermal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Dalian Thermal
The main advantage of trading using opposite Citigroup and Dalian Thermal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Dalian Thermal 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 Dalian Thermal will offset losses from the drop in Dalian Thermal's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Dalian Thermal vs. Lutian Machinery Co | Dalian Thermal vs. China Longyuan Power | Dalian Thermal vs. PetroChina Co Ltd | Dalian Thermal vs. Bank of China |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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