Correlation Between Citigroup and China Eastern
Can any of the company-specific risk be diversified away by investing in both Citigroup and China Eastern 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 China Eastern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and China Eastern Airlines, you can compare the effects of market volatilities on Citigroup and China Eastern 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 China Eastern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and China Eastern.
Diversification Opportunities for Citigroup and China Eastern
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and China is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and China Eastern Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Eastern Airlines 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 China Eastern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Eastern Airlines has no effect on the direction of Citigroup i.e., Citigroup and China Eastern go up and down completely randomly.
Pair Corralation between Citigroup and China Eastern
If you would invest 4,357 in Citigroup on August 26, 2024 and sell it today you would earn a total of 2,627 from holding Citigroup or generate 60.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 0.3% |
| Values | Daily Returns |
Citigroup vs. China Eastern Airlines
Performance |
| Timeline |
| Citigroup |
| China Eastern Airlines |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Citigroup and China Eastern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and China Eastern
The main advantage of trading using opposite Citigroup and China Eastern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, China Eastern 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 China Eastern will offset losses from the drop in China Eastern's long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
| China Eastern vs. Nomura Holdings ADR | China Eastern vs. Jeld Wen Holding | China Eastern vs. Highway Holdings Limited | China Eastern vs. Morgan Stanley |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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