Correlation Between Citigroup and Rbc China
Can any of the company-specific risk be diversified away by investing in both Citigroup and Rbc China 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 Rbc China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Rbc China Equity, you can compare the effects of market volatilities on Citigroup and Rbc China 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 Rbc China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Rbc China.
Diversification Opportunities for Citigroup and Rbc China
Weak diversification
The 3 months correlation between Citigroup and Rbc is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Rbc China Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rbc China Equity 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 Rbc China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rbc China Equity has no effect on the direction of Citigroup i.e., Citigroup and Rbc China go up and down completely randomly.
Pair Corralation between Citigroup and Rbc China
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.07 times more return on investment than Rbc China. However, Citigroup is 1.07 times more volatile than Rbc China Equity. It trades about 0.2 of its potential returns per unit of risk. Rbc China Equity is currently generating about -0.12 per unit of risk. If you would invest 6,412 in Citigroup on August 30, 2024 and sell it today you would earn a total of 604.00 from holding Citigroup or generate 9.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Rbc China Equity
Performance |
| Timeline |
| Citigroup |
| Rbc China Equity |
Citigroup and Rbc China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Rbc China
The main advantage of trading using opposite Citigroup and Rbc China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Rbc China 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 Rbc China will offset losses from the drop in Rbc China's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Rbc China vs. Fisher Fixed Income | Rbc China vs. Ms Global Fixed | Rbc China vs. Touchstone International Equity | Rbc China vs. Gmo Global Equity |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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