Correlation Between Citigroup and Sumitomo Electric
Can any of the company-specific risk be diversified away by investing in both Citigroup and Sumitomo Electric 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 Sumitomo Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Sumitomo Electric Industries, you can compare the effects of market volatilities on Citigroup and Sumitomo Electric 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 Sumitomo Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Sumitomo Electric.
Diversification Opportunities for Citigroup and Sumitomo Electric
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Sumitomo is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Sumitomo Electric Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sumitomo Electric 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 Sumitomo Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sumitomo Electric has no effect on the direction of Citigroup i.e., Citigroup and Sumitomo Electric go up and down completely randomly.
Pair Corralation between Citigroup and Sumitomo Electric
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. Sumitomo Electric Industries
Performance |
| Timeline |
| Citigroup |
| Sumitomo Electric |
Citigroup and Sumitomo Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Sumitomo Electric
The main advantage of trading using opposite Citigroup and Sumitomo Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Sumitomo Electric 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 Sumitomo Electric will offset losses from the drop in Sumitomo Electric's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Sumitomo Electric vs. Micron Technology | Sumitomo Electric vs. Elmos Semiconductor SE | Sumitomo Electric vs. ASE Industrial Holding | Sumitomo Electric vs. Perseus Mining Limited |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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