Correlation Between Citigroup and FIH Mobile
Can any of the company-specific risk be diversified away by investing in both Citigroup and FIH Mobile 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 FIH Mobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and FIH Mobile Limited, you can compare the effects of market volatilities on Citigroup and FIH Mobile 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 FIH Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and FIH Mobile.
Diversification Opportunities for Citigroup and FIH Mobile
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and FIH is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and FIH Mobile Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIH Mobile Limited 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 FIH Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIH Mobile Limited has no effect on the direction of Citigroup i.e., Citigroup and FIH Mobile go up and down completely randomly.
Pair Corralation between Citigroup and FIH Mobile
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.39 times more return on investment than FIH Mobile. However, Citigroup is 2.54 times less risky than FIH Mobile. It trades about 0.15 of its potential returns per unit of risk. FIH Mobile Limited is currently generating about -0.05 per unit of risk. If you would invest 6,205 in Citigroup on August 30, 2024 and sell it today you would earn a total of 811.00 from holding Citigroup or generate 13.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.73% |
| Values | Daily Returns |
Citigroup vs. FIH Mobile Limited
Performance |
| Timeline |
| Citigroup |
| FIH Mobile Limited |
Citigroup and FIH Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and FIH Mobile
The main advantage of trading using opposite Citigroup and FIH Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, FIH Mobile 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 FIH Mobile will offset losses from the drop in FIH Mobile's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| FIH Mobile vs. WESTLAKE CHEMICAL | FIH Mobile vs. MARKET VECTR RETAIL | FIH Mobile vs. JIAHUA STORES | FIH Mobile vs. Westlake Chemical |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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