Correlation Between Citigroup and Yakult Honsha
Can any of the company-specific risk be diversified away by investing in both Citigroup and Yakult Honsha 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 Yakult Honsha into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Yakult Honsha CoLtd, you can compare the effects of market volatilities on Citigroup and Yakult Honsha 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 Yakult Honsha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Yakult Honsha.
Diversification Opportunities for Citigroup and Yakult Honsha
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and Yakult is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Yakult Honsha CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yakult Honsha CoLtd 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 Yakult Honsha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yakult Honsha CoLtd has no effect on the direction of Citigroup i.e., Citigroup and Yakult Honsha go up and down completely randomly.
Pair Corralation between Citigroup and Yakult Honsha
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.13 times more return on investment than Yakult Honsha. However, Citigroup is 1.13 times more volatile than Yakult Honsha CoLtd. It trades about 0.13 of its potential returns per unit of risk. Yakult Honsha CoLtd is currently generating about 0.01 per unit of risk. If you would invest 6,092 in Citigroup on September 2, 2024 and sell it today you would earn a total of 995.00 from holding Citigroup or generate 16.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 96.97% |
| Values | Daily Returns |
Citigroup vs. Yakult Honsha CoLtd
Performance |
| Timeline |
| Citigroup |
| Yakult Honsha CoLtd |
Citigroup and Yakult Honsha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Yakult Honsha
The main advantage of trading using opposite Citigroup and Yakult Honsha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Yakult Honsha 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 Yakult Honsha will offset losses from the drop in Yakult Honsha's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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