Correlation Between Citigroup and NGK Insulators
Can any of the company-specific risk be diversified away by investing in both Citigroup and NGK Insulators 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 NGK Insulators into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and NGK Insulators, you can compare the effects of market volatilities on Citigroup and NGK Insulators 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 NGK Insulators. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and NGK Insulators.
Diversification Opportunities for Citigroup and NGK Insulators
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and NGK is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and NGK Insulators in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NGK Insulators 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 NGK Insulators. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NGK Insulators has no effect on the direction of Citigroup i.e., Citigroup and NGK Insulators go up and down completely randomly.
Pair Corralation between Citigroup and NGK Insulators
If you would invest 6,235 in Citigroup on September 5, 2024 and sell it today you would earn a total of 915.00 from holding Citigroup or generate 14.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Citigroup vs. NGK Insulators
Performance |
| Timeline |
| Citigroup |
| NGK Insulators |
Citigroup and NGK Insulators Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and NGK Insulators
The main advantage of trading using opposite Citigroup and NGK Insulators positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, NGK Insulators 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 NGK Insulators will offset losses from the drop in NGK Insulators' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| NGK Insulators vs. Dear Cashmere Holding | NGK Insulators vs. Goff Corp | NGK Insulators vs. Wialan Technologies | NGK Insulators vs. Cgrowth Capital |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |