Correlation Between Citigroup and Yufo Electronics
Can any of the company-specific risk be diversified away by investing in both Citigroup and Yufo Electronics 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 Yufo Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Yufo Electronics Co, you can compare the effects of market volatilities on Citigroup and Yufo Electronics 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 Yufo Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Yufo Electronics.
Diversification Opportunities for Citigroup and Yufo Electronics
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and Yufo is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Yufo Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yufo Electronics 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 Yufo Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yufo Electronics has no effect on the direction of Citigroup i.e., Citigroup and Yufo Electronics go up and down completely randomly.
Pair Corralation between Citigroup and Yufo Electronics
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.38 times less return on investment than Yufo Electronics. But when comparing it to its historical volatility, Citigroup is 1.46 times less risky than Yufo Electronics. It trades about 0.07 of its potential returns per unit of risk. Yufo Electronics Co is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,171 in Yufo Electronics Co on September 3, 2024 and sell it today you would earn a total of 1,614 from holding Yufo Electronics Co or generate 74.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 96.63% |
| Values | Daily Returns |
Citigroup vs. Yufo Electronics Co
Performance |
| Timeline |
| Citigroup |
| Yufo Electronics |
Citigroup and Yufo Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Yufo Electronics
The main advantage of trading using opposite Citigroup and Yufo Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Yufo Electronics 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 Yufo Electronics will offset losses from the drop in Yufo Electronics' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Yufo Electronics vs. Simple Mart Retail | Yufo Electronics vs. APEX International Financial | Yufo Electronics vs. Central Reinsurance Corp | Yufo Electronics vs. Shiny Chemical Industrial |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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