Correlation Between Citigroup and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Citigroup and Samsung Electronics 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 Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Samsung Electronics Co, you can compare the effects of market volatilities on Citigroup and Samsung Electronics 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 Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Samsung Electronics.
Diversification Opportunities for Citigroup and Samsung Electronics
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and Samsung is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics 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 Samsung Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Electronics has no effect on the direction of Citigroup i.e., Citigroup and Samsung Electronics go up and down completely randomly.
Pair Corralation between Citigroup and Samsung Electronics
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.61 times more return on investment than Samsung Electronics. However, Citigroup is 1.63 times less risky than Samsung Electronics. It trades about 0.23 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.02 per unit of risk. If you would invest 6,360 in Citigroup on August 27, 2024 and sell it today you would earn a total of 624.00 from holding Citigroup or generate 9.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Samsung Electronics Co
Performance |
| Timeline |
| Citigroup |
| Samsung Electronics |
Citigroup and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Samsung Electronics
The main advantage of trading using opposite Citigroup and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Samsung Electronics 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 Samsung Electronics will offset losses from the drop in Samsung Electronics' long position.| Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
| Samsung Electronics vs. Futura Medical | Samsung Electronics vs. Evolution Gaming Group | Samsung Electronics vs. Games Workshop Group | Samsung Electronics vs. AMG Advanced Metallurgical |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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