Correlation Between Citigroup and Weiss Korea
Can any of the company-specific risk be diversified away by investing in both Citigroup and Weiss Korea 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 Weiss Korea into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Weiss Korea Opportunity, you can compare the effects of market volatilities on Citigroup and Weiss Korea 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 Weiss Korea. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Weiss Korea.
Diversification Opportunities for Citigroup and Weiss Korea
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and Weiss is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Weiss Korea Opportunity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weiss Korea Opportunity 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 Weiss Korea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weiss Korea Opportunity has no effect on the direction of Citigroup i.e., Citigroup and Weiss Korea go up and down completely randomly.
Pair Corralation between Citigroup and Weiss Korea
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.11 times less return on investment than Weiss Korea. But when comparing it to its historical volatility, Citigroup is 2.0 times less risky than Weiss Korea. It trades about 0.42 of its potential returns per unit of risk. Weiss Korea Opportunity is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 13,550 in Weiss Korea Opportunity on November 3, 2024 and sell it today you would earn a total of 2,604 from holding Weiss Korea Opportunity or generate 19.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Citigroup vs. Weiss Korea Opportunity
Performance |
| Timeline |
| Citigroup |
| Weiss Korea Opportunity |
Citigroup and Weiss Korea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Weiss Korea
The main advantage of trading using opposite Citigroup and Weiss Korea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Weiss Korea 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 Weiss Korea will offset losses from the drop in Weiss Korea's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Weiss Korea vs. AcadeMedia AB | Weiss Korea vs. MediaZest plc | Weiss Korea vs. Ubisoft Entertainment | Weiss Korea vs. Alliance Data Systems |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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