Correlation Between Citigroup and Anhui Gujing

Can any of the company-specific risk be diversified away by investing in both Citigroup and Anhui Gujing 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 Anhui Gujing into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Citigroup and Anhui Gujing Distillery, you can compare the effects of market volatilities on Citigroup and Anhui Gujing 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 Anhui Gujing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Anhui Gujing.

Diversification Opportunities for Citigroup and Anhui Gujing

-0.7

Correlation Coefficient

Citigroup  Anhui Gujing

Excellent diversification

The 3 months correlation between Citigroup and Anhui is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Anhui Gujing Distillery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Gujing Distillery 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 Anhui Gujing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anhui Gujing Distillery has no effect on the direction of Citigroup i.e., Citigroup and Anhui Gujing go up and down completely randomly.

Pair Corralation between Citigroup and Anhui Gujing

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.84 times less return on investment than Anhui Gujing. In addition to that, Citigroup is 1.02 times more volatile than Anhui Gujing Distillery. It trades about 0.01 of its total potential returns per unit of risk. Anhui Gujing Distillery is currently generating about 0.03 per unit of volatility. If you would invest  16,954  in Anhui Gujing Distillery on December 30, 2024 and sell it today you would earn a total of  355.00  from holding Anhui Gujing Distillery or generate 2.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.16%
Values	Daily Returns

Citigroup  vs.  Anhui Gujing Distillery

Citigroup

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Citigroup is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Anhui Gujing Distillery

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Anhui Gujing Distillery are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Anhui Gujing is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Citigroup and Anhui Gujing

The main advantage of trading using opposite Citigroup and Anhui Gujing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Anhui Gujing 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 Anhui Gujing will offset losses from the drop in Anhui Gujing's long position.

The idea behind Citigroup and Anhui Gujing Distillery pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.