Correlation Between Citigroup and HSBC UK
Can any of the company-specific risk be diversified away by investing in both Citigroup and HSBC UK 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 HSBC UK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and HSBC UK SUS, you can compare the effects of market volatilities on Citigroup and HSBC UK 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 HSBC UK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and HSBC UK.
Diversification Opportunities for Citigroup and HSBC UK
Very good diversification
The 3 months correlation between Citigroup and HSBC is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and HSBC UK SUS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HSBC UK SUS 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 HSBC UK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HSBC UK SUS has no effect on the direction of Citigroup i.e., Citigroup and HSBC UK go up and down completely randomly.
Pair Corralation between Citigroup and HSBC UK
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.13 times more return on investment than HSBC UK. However, Citigroup is 2.13 times more volatile than HSBC UK SUS. It trades about 0.21 of its potential returns per unit of risk. HSBC UK SUS is currently generating about 0.09 per unit of risk. If you would invest 6,393 in Citigroup on August 31, 2024 and sell it today you would earn a total of 623.00 from holding Citigroup or generate 9.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. HSBC UK SUS
Performance |
| Timeline |
| Citigroup |
| HSBC UK SUS |
Citigroup and HSBC UK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and HSBC UK
The main advantage of trading using opposite Citigroup and HSBC UK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, HSBC UK 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 HSBC UK will offset losses from the drop in HSBC UK's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| HSBC UK vs. HSBC MSCI China | HSBC UK vs. HSBC Emerging Market | HSBC UK vs. HSBC USA Sustainable | HSBC UK vs. HSBC MSCI Japan |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |