Correlation Between Citigroup and CK Asset
Can any of the company-specific risk be diversified away by investing in both Citigroup and CK Asset 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 CK Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and CK Asset Holdings, you can compare the effects of market volatilities on Citigroup and CK Asset 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 CK Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and CK Asset.
Diversification Opportunities for Citigroup and CK Asset
Excellent diversification
The 3 months correlation between Citigroup and CHKGF is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and CK Asset Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CK Asset Holdings 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 CK Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CK Asset Holdings has no effect on the direction of Citigroup i.e., Citigroup and CK Asset go up and down completely randomly.
Pair Corralation between Citigroup and CK Asset
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.56 times more return on investment than CK Asset. However, Citigroup is 1.79 times less risky than CK Asset. It trades about 0.11 of its potential returns per unit of risk. CK Asset Holdings is currently generating about -0.04 per unit of risk. If you would invest 4,567 in Citigroup on August 29, 2024 and sell it today you would earn a total of 2,408 from holding Citigroup or generate 52.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 52.82% |
| Values | Daily Returns |
Citigroup vs. CK Asset Holdings
Performance |
| Timeline |
| Citigroup |
| CK Asset Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
Citigroup and CK Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and CK Asset
The main advantage of trading using opposite Citigroup and CK Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, CK Asset 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 CK Asset will offset losses from the drop in CK Asset's long position.The idea behind Citigroup and CK Asset Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| CK Asset vs. Hong Kong Land | CK Asset vs. Sino Land Co | CK Asset vs. CK Hutchison Holdings | CK Asset vs. CK Hutchison Holdings |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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