Correlation Between Citigroup and Mitsubishi Estate
Can any of the company-specific risk be diversified away by investing in both Citigroup and Mitsubishi Estate 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 Mitsubishi Estate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Mitsubishi Estate Co, you can compare the effects of market volatilities on Citigroup and Mitsubishi Estate 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 Mitsubishi Estate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Mitsubishi Estate.
Diversification Opportunities for Citigroup and Mitsubishi Estate
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Citigroup and Mitsubishi is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Mitsubishi Estate Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitsubishi Estate 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 Mitsubishi Estate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitsubishi Estate has no effect on the direction of Citigroup i.e., Citigroup and Mitsubishi Estate go up and down completely randomly.
Pair Corralation between Citigroup and Mitsubishi Estate
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.91 times more return on investment than Mitsubishi Estate. However, Citigroup is 1.1 times less risky than Mitsubishi Estate. It trades about 0.08 of its potential returns per unit of risk. Mitsubishi Estate Co is currently generating about 0.03 per unit of risk. If you would invest 4,746 in Citigroup on November 2, 2024 and sell it today you would earn a total of 3,474 from holding Citigroup or generate 73.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.6% |
| Values | Daily Returns |
Citigroup vs. Mitsubishi Estate Co
Performance |
| Timeline |
| Citigroup |
| Mitsubishi Estate |
Citigroup and Mitsubishi Estate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Mitsubishi Estate
The main advantage of trading using opposite Citigroup and Mitsubishi Estate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Mitsubishi Estate 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 Mitsubishi Estate will offset losses from the drop in Mitsubishi Estate's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Mitsubishi Estate vs. TEXAS ROADHOUSE | Mitsubishi Estate vs. CarsalesCom | Mitsubishi Estate vs. SALESFORCE INC CDR | Mitsubishi Estate vs. Salesforce |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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