Correlation Between Citigroup and Chaoda Modern
Can any of the company-specific risk be diversified away by investing in both Citigroup and Chaoda Modern 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 Chaoda Modern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Chaoda Modern Agriculture, you can compare the effects of market volatilities on Citigroup and Chaoda Modern 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 Chaoda Modern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Chaoda Modern.
Diversification Opportunities for Citigroup and Chaoda Modern
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Chaoda is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Chaoda Modern Agriculture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chaoda Modern Agriculture 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 Chaoda Modern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chaoda Modern Agriculture has no effect on the direction of Citigroup i.e., Citigroup and Chaoda Modern go up and down completely randomly.
Pair Corralation between Citigroup and Chaoda Modern
Taking into account the 90-day investment horizon Citigroup is expected to generate 31.86 times less return on investment than Chaoda Modern. But when comparing it to its historical volatility, Citigroup is 40.89 times less risky than Chaoda Modern. It trades about 0.27 of its potential returns per unit of risk. Chaoda Modern Agriculture is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 0.04 in Chaoda Modern Agriculture on September 2, 2024 and sell it today you would earn a total of 0.16 from holding Chaoda Modern Agriculture or generate 400.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Citigroup vs. Chaoda Modern Agriculture
Performance |
| Timeline |
| Citigroup |
| Chaoda Modern Agriculture |
Citigroup and Chaoda Modern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Chaoda Modern
The main advantage of trading using opposite Citigroup and Chaoda Modern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Chaoda Modern 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 Chaoda Modern will offset losses from the drop in Chaoda Modern's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Chaoda Modern vs. SLC Agricola SA | Chaoda Modern vs. Adecoagro SA | Chaoda Modern vs. Limoneira Co | Chaoda Modern vs. Forafric Global PLC |
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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