Correlation Between Citigroup and Boustead Heavy
Can any of the company-specific risk be diversified away by investing in both Citigroup and Boustead Heavy 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 Boustead Heavy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Boustead Heavy Industries, you can compare the effects of market volatilities on Citigroup and Boustead Heavy 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 Boustead Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Boustead Heavy.
Diversification Opportunities for Citigroup and Boustead Heavy
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and Boustead is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Boustead Heavy Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boustead Heavy Industries 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 Boustead Heavy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boustead Heavy Industries has no effect on the direction of Citigroup i.e., Citigroup and Boustead Heavy go up and down completely randomly.
Pair Corralation between Citigroup and Boustead Heavy
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.13 times less return on investment than Boustead Heavy. But when comparing it to its historical volatility, Citigroup is 2.89 times less risky than Boustead Heavy. It trades about 0.08 of its potential returns per unit of risk. Boustead Heavy Industries is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 34.00 in Boustead Heavy Industries on September 2, 2024 and sell it today you would earn a total of 6.00 from holding Boustead Heavy Industries or generate 17.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.39% |
| Values | Daily Returns |
Citigroup vs. Boustead Heavy Industries
Performance |
| Timeline |
| Citigroup |
| Boustead Heavy Industries |
Citigroup and Boustead Heavy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Boustead Heavy
The main advantage of trading using opposite Citigroup and Boustead Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Boustead Heavy 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 Boustead Heavy will offset losses from the drop in Boustead Heavy's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Boustead Heavy vs. Dataprep Holdings Bhd | Boustead Heavy vs. PIE Industrial Bhd | Boustead Heavy vs. YX Precious Metals | Boustead Heavy vs. Petronas Chemicals Group |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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