Correlation Between Citigroup and Generation Asia
Can any of the company-specific risk be diversified away by investing in both Citigroup and Generation Asia 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 Generation Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Generation Asia I, you can compare the effects of market volatilities on Citigroup and Generation Asia 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 Generation Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Generation Asia.
Diversification Opportunities for Citigroup and Generation Asia
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Generation is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Generation Asia I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Generation Asia I 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 Generation Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Generation Asia I has no effect on the direction of Citigroup i.e., Citigroup and Generation Asia go up and down completely randomly.
Pair Corralation between Citigroup and Generation Asia
Taking into account the 90-day investment horizon Citigroup is expected to generate 8.26 times more return on investment than Generation Asia. However, Citigroup is 8.26 times more volatile than Generation Asia I. It trades about 0.07 of its potential returns per unit of risk. Generation Asia I is currently generating about 0.05 per unit of risk. If you would invest 6,064 in Citigroup on September 3, 2024 and sell it today you would earn a total of 1,023 from holding Citigroup or generate 16.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 89.6% |
| Values | Daily Returns |
Citigroup vs. Generation Asia I
Performance |
| Timeline |
| Citigroup |
| Generation Asia I |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Citigroup and Generation Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Generation Asia
The main advantage of trading using opposite Citigroup and Generation Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Generation Asia 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 Generation Asia will offset losses from the drop in Generation Asia's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Generation Asia vs. Green Planet Bio | Generation Asia vs. Opus Magnum Ameris | Generation Asia vs. Azure Holding Group | Generation Asia vs. Four Leaf Acquisition |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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