Correlation Between Citigroup and Delta Asia
Can any of the company-specific risk be diversified away by investing in both Citigroup and Delta Asia 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 Delta Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Delta Asia International, you can compare the effects of market volatilities on Citigroup and Delta Asia 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 Delta Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Delta Asia.
Diversification Opportunities for Citigroup and Delta Asia
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and Delta is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Delta Asia International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delta Asia International 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 Delta Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delta Asia International has no effect on the direction of Citigroup i.e., Citigroup and Delta Asia go up and down completely randomly.
Pair Corralation between Citigroup and Delta Asia
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.46 times more return on investment than Delta Asia. However, Citigroup is 1.46 times more volatile than Delta Asia International. It trades about 0.32 of its potential returns per unit of risk. Delta Asia International is currently generating about -0.06 per unit of risk. If you would invest 6,235 in Citigroup on September 3, 2024 and sell it today you would earn a total of 852.00 from holding Citigroup or generate 13.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Citigroup vs. Delta Asia International
Performance |
| Timeline |
| Citigroup |
| Delta Asia International |
Citigroup and Delta Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Delta Asia
The main advantage of trading using opposite Citigroup and Delta Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Delta Asia 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 Delta Asia will offset losses from the drop in Delta Asia's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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