Correlation Between Citigroup and Matthews International
Can any of the company-specific risk be diversified away by investing in both Citigroup and Matthews International 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 Matthews International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Matthews International Funds, you can compare the effects of market volatilities on Citigroup and Matthews International 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 Matthews International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Matthews International.
Diversification Opportunities for Citigroup and Matthews International
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Citigroup and Matthews is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Matthews International Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matthews 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 Matthews International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matthews International has no effect on the direction of Citigroup i.e., Citigroup and Matthews International go up and down completely randomly.
Pair Corralation between Citigroup and Matthews International
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.44 times more return on investment than Matthews International. However, Citigroup is 1.44 times more volatile than Matthews International Funds. It trades about 0.08 of its potential returns per unit of risk. Matthews International Funds is currently generating about 0.02 per unit of risk. If you would invest 4,544 in Citigroup on September 1, 2024 and sell it today you would earn a total of 2,543 from holding Citigroup or generate 55.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 80.91% |
| Values | Daily Returns |
Citigroup vs. Matthews International Funds
Performance |
| Timeline |
| Citigroup |
| Matthews International |
Citigroup and Matthews International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Matthews International
The main advantage of trading using opposite Citigroup and Matthews International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Matthews International 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 Matthews International will offset losses from the drop in Matthews International'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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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