Correlation Between Citigroup and Sichuan Furong
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By analyzing existing cross correlation between Citigroup and Sichuan Furong Technology, you can compare the effects of market volatilities on Citigroup and Sichuan Furong 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 Sichuan Furong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Sichuan Furong.
Diversification Opportunities for Citigroup and Sichuan Furong
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Citigroup and Sichuan is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Sichuan Furong Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sichuan Furong Technology 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 Sichuan Furong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sichuan Furong Technology has no effect on the direction of Citigroup i.e., Citigroup and Sichuan Furong go up and down completely randomly.
Pair Corralation between Citigroup and Sichuan Furong
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.54 times more return on investment than Sichuan Furong. However, Citigroup is 1.85 times less risky than Sichuan Furong. It trades about 0.07 of its potential returns per unit of risk. Sichuan Furong Technology is currently generating about -0.13 per unit of risk. If you would invest 6,975 in Citigroup on September 27, 2024 and sell it today you would earn a total of 125.00 from holding Citigroup or generate 1.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Citigroup vs. Sichuan Furong Technology
Performance |
| Timeline |
| Citigroup |
| Sichuan Furong Technology |
Citigroup and Sichuan Furong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Sichuan Furong
The main advantage of trading using opposite Citigroup and Sichuan Furong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Sichuan Furong 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 Sichuan Furong will offset losses from the drop in Sichuan Furong's long position.The idea behind Citigroup and Sichuan Furong Technology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Sichuan Furong vs. Bank of China | Sichuan Furong vs. Kweichow Moutai Co | Sichuan Furong vs. PetroChina Co Ltd | Sichuan Furong vs. Bank of Communications |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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