Correlation Between Citigroup and CHINA WATER
Can any of the company-specific risk be diversified away by investing in both Citigroup and CHINA WATER 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 WATER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and CHINA WATER IGR, you can compare the effects of market volatilities on Citigroup and CHINA WATER 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 WATER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and CHINA WATER.
Diversification Opportunities for Citigroup and CHINA WATER
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and CHINA is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and CHINA WATER IGR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA WATER IGR 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 WATER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA WATER IGR has no effect on the direction of Citigroup i.e., Citigroup and CHINA WATER go up and down completely randomly.
Pair Corralation between Citigroup and CHINA WATER
If you would invest 6,977 in Citigroup on October 22, 2024 and sell it today you would earn a total of 1,022 from holding Citigroup or generate 14.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 78.95% |
| Values | Daily Returns |
Citigroup vs. CHINA WATER IGR
Performance |
| Timeline |
| Citigroup |
| CHINA WATER IGR |
Citigroup and CHINA WATER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and CHINA WATER
The main advantage of trading using opposite Citigroup and CHINA WATER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, CHINA WATER 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 WATER will offset losses from the drop in CHINA WATER's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| CHINA WATER vs. Apple Inc | CHINA WATER vs. Apple Inc | CHINA WATER vs. Apple Inc | CHINA WATER vs. Apple Inc |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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