Correlation Between Citigroup and Shenzhen Investment
Can any of the company-specific risk be diversified away by investing in both Citigroup and Shenzhen Investment 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 Shenzhen Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Shenzhen Investment Bay, you can compare the effects of market volatilities on Citigroup and Shenzhen Investment 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 Shenzhen Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Shenzhen Investment.
Diversification Opportunities for Citigroup and Shenzhen Investment
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Shenzhen is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Shenzhen Investment Bay in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Investment Bay 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 Shenzhen Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Investment Bay has no effect on the direction of Citigroup i.e., Citigroup and Shenzhen Investment go up and down completely randomly.
Pair Corralation between Citigroup and Shenzhen Investment
Taking into account the 90-day investment horizon Citigroup is expected to generate 25.91 times more return on investment than Shenzhen Investment. However, Citigroup is 25.91 times more volatile than Shenzhen Investment Bay. It trades about 0.26 of its potential returns per unit of risk. Shenzhen Investment Bay is currently generating about -0.21 per unit of risk. If you would invest 6,361 in Citigroup on September 1, 2024 and sell it today you would earn a total of 726.00 from holding Citigroup or generate 11.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Citigroup vs. Shenzhen Investment Bay
Performance |
| Timeline |
| Citigroup |
| Shenzhen Investment Bay |
Citigroup and Shenzhen Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Shenzhen Investment
The main advantage of trading using opposite Citigroup and Shenzhen Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Shenzhen Investment 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 Shenzhen Investment will offset losses from the drop in Shenzhen Investment's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Shenzhen Investment vs. Jiangsu Expressway Co | Shenzhen Investment vs. Jiangsu Expressway | Shenzhen Investment vs. Zhejiang Expressway Co | Shenzhen Investment vs. Yuexiu Transport Infrastructure |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |