Correlation Between Citigroup and Keikyu
Can any of the company-specific risk be diversified away by investing in both Citigroup and Keikyu 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 Keikyu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Keikyu, you can compare the effects of market volatilities on Citigroup and Keikyu 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 Keikyu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Keikyu.
Diversification Opportunities for Citigroup and Keikyu
Pay attention - limited upside
The 3 months correlation between Citigroup and Keikyu is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Keikyu in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keikyu 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 Keikyu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keikyu has no effect on the direction of Citigroup i.e., Citigroup and Keikyu go up and down completely randomly.
Pair Corralation between Citigroup and Keikyu
Taking into account the 90-day investment horizon Citigroup is expected to generate 3.85 times less return on investment than Keikyu. But when comparing it to its historical volatility, Citigroup is 3.48 times less risky than Keikyu. It trades about 0.07 of its potential returns per unit of risk. Keikyu is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 335.00 in Keikyu on August 30, 2024 and sell it today you would earn a total of 1,295 from holding Keikyu or generate 386.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 91.11% |
| Values | Daily Returns |
Citigroup vs. Keikyu
Performance |
| Timeline |
| Citigroup |
| Keikyu |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Citigroup and Keikyu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Keikyu
The main advantage of trading using opposite Citigroup and Keikyu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Keikyu 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 Keikyu will offset losses from the drop in Keikyu's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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