Correlation Between Citigroup and China Yuchai
Can any of the company-specific risk be diversified away by investing in both Citigroup and China Yuchai 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 Yuchai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and China Yuchai International, you can compare the effects of market volatilities on Citigroup and China Yuchai 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 Yuchai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and China Yuchai.
Diversification Opportunities for Citigroup and China Yuchai
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and China is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and China Yuchai International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Yuchai Interna 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 Yuchai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Yuchai Interna has no effect on the direction of Citigroup i.e., Citigroup and China Yuchai go up and down completely randomly.
Pair Corralation between Citigroup and China Yuchai
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.88 times more return on investment than China Yuchai. However, Citigroup is 1.14 times less risky than China Yuchai. It trades about 0.09 of its potential returns per unit of risk. China Yuchai International is currently generating about 0.05 per unit of risk. If you would invest 5,401 in Citigroup on August 27, 2024 and sell it today you would earn a total of 1,583 from holding Citigroup or generate 29.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. China Yuchai International
Performance |
| Timeline |
| Citigroup |
| China Yuchai Interna |
Citigroup and China Yuchai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and China Yuchai
The main advantage of trading using opposite Citigroup and China Yuchai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, China Yuchai 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 Yuchai will offset losses from the drop in China Yuchai's long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
| China Yuchai vs. China Natural Resources | China Yuchai vs. Sonida Senior Living | China Yuchai vs. UTStarcom Holdings Corp | China Yuchai vs. Deswell Industries |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |