Correlation Between Citigroup and Jiangsu Expressway
Can any of the company-specific risk be diversified away by investing in both Citigroup and Jiangsu Expressway 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 Jiangsu Expressway into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Jiangsu Expressway, you can compare the effects of market volatilities on Citigroup and Jiangsu Expressway 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 Jiangsu Expressway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Jiangsu Expressway.
Diversification Opportunities for Citigroup and Jiangsu Expressway
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Citigroup and Jiangsu is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Jiangsu Expressway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu Expressway 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 Jiangsu Expressway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu Expressway has no effect on the direction of Citigroup i.e., Citigroup and Jiangsu Expressway go up and down completely randomly.
Pair Corralation between Citigroup and Jiangsu Expressway
Taking into account the 90-day investment horizon Citigroup is expected to generate 7.06 times less return on investment than Jiangsu Expressway. But when comparing it to its historical volatility, Citigroup is 9.12 times less risky than Jiangsu Expressway. It trades about 0.07 of its potential returns per unit of risk. Jiangsu Expressway is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 86.00 in Jiangsu Expressway on August 30, 2024 and sell it today you would earn a total of 12.00 from holding Jiangsu Expressway or generate 13.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 59.8% |
| Values | Daily Returns |
Citigroup vs. Jiangsu Expressway
Performance |
| Timeline |
| Citigroup |
| Jiangsu Expressway |
Citigroup and Jiangsu Expressway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Jiangsu Expressway
The main advantage of trading using opposite Citigroup and Jiangsu Expressway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Jiangsu Expressway 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 Jiangsu Expressway will offset losses from the drop in Jiangsu Expressway's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Jiangsu Expressway vs. Verra Mobility Corp | Jiangsu Expressway vs. HUMANA INC | Jiangsu Expressway vs. Aquagold International | Jiangsu Expressway vs. Barloworld Ltd ADR |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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