Correlation Between Citigroup and China Rare
Can any of the company-specific risk be diversified away by investing in both Citigroup and China Rare 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 Rare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and China Rare Earth, you can compare the effects of market volatilities on Citigroup and China Rare 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 Rare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and China Rare.
Diversification Opportunities for Citigroup and China Rare
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and China is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and China Rare Earth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Rare Earth 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 Rare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Rare Earth has no effect on the direction of Citigroup i.e., Citigroup and China Rare go up and down completely randomly.
Pair Corralation between Citigroup and China Rare
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.36 times more return on investment than China Rare. However, Citigroup is 2.75 times less risky than China Rare. It trades about 0.22 of its potential returns per unit of risk. China Rare Earth is currently generating about 0.03 per unit of risk. If you would invest 6,360 in Citigroup on August 29, 2024 and sell it today you would earn a total of 656.00 from holding Citigroup or generate 10.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. China Rare Earth
Performance |
| Timeline |
| Citigroup |
| China Rare Earth |
Citigroup and China Rare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and China Rare
The main advantage of trading using opposite Citigroup and China Rare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, China Rare 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 Rare will offset losses from the drop in China Rare's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| China Rare vs. Rockridge Resources | China Rare vs. Ameriwest Lithium | China Rare vs. Osisko Metals Incorporated | China Rare vs. Volt Lithium Corp |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |