Correlation Between Citigroup and Nishi Nippon
Can any of the company-specific risk be diversified away by investing in both Citigroup and Nishi Nippon 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 Nishi Nippon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Nishi Nippon Railroad Co, you can compare the effects of market volatilities on Citigroup and Nishi Nippon 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 Nishi Nippon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Nishi Nippon.
Diversification Opportunities for Citigroup and Nishi Nippon
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Nishi is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Nishi Nippon Railroad Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nishi Nippon Railroad 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 Nishi Nippon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nishi Nippon Railroad has no effect on the direction of Citigroup i.e., Citigroup and Nishi Nippon go up and down completely randomly.
Pair Corralation between Citigroup and Nishi Nippon
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.58 times more return on investment than Nishi Nippon. However, Citigroup is 1.73 times less risky than Nishi Nippon. It trades about 0.08 of its potential returns per unit of risk. Nishi Nippon Railroad Co is currently generating about 0.04 per unit of risk. If you would invest 4,525 in Citigroup on August 31, 2024 and sell it today you would earn a total of 2,562 from holding Citigroup or generate 56.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.42% |
| Values | Daily Returns |
Citigroup vs. Nishi Nippon Railroad Co
Performance |
| Timeline |
| Citigroup |
| Nishi Nippon Railroad |
Citigroup and Nishi Nippon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Nishi Nippon
The main advantage of trading using opposite Citigroup and Nishi Nippon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Nishi Nippon 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 Nishi Nippon will offset losses from the drop in Nishi Nippon's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Nishi Nippon vs. Union Pacific | Nishi Nippon vs. Superior Plus Corp | Nishi Nippon vs. NMI Holdings | Nishi Nippon vs. Origin Agritech |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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