Correlation Between Citigroup and Yunnan Xiyi

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

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

Diversification Opportunities for Citigroup and Yunnan Xiyi

0.69

Correlation Coefficient

Citigroup  Yunnan Xiyi

Poor diversification

The 3 months correlation between Citigroup and Yunnan is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Yunnan Xiyi Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yunnan Xiyi Industrial 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 Yunnan Xiyi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yunnan Xiyi Industrial has no effect on the direction of Citigroup i.e., Citigroup and Yunnan Xiyi go up and down completely randomly.

Pair Corralation between Citigroup and Yunnan Xiyi

Taking into account the 90-day investment horizon Citigroup is expected to under-perform the Yunnan Xiyi. But the stock apears to be less risky and, when comparing its historical volatility, Citigroup is 6.08 times less risky than Yunnan Xiyi. The stock trades about -0.06 of its potential returns per unit of risk. The Yunnan Xiyi Industrial is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  1,835  in Yunnan Xiyi Industrial on October 7, 2024 and sell it today you would earn a total of  795.00  from holding Yunnan Xiyi Industrial or generate 43.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.24%
Values	Daily Returns

Citigroup  vs.  Yunnan Xiyi Industrial

Citigroup

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

Yunnan Xiyi Industrial

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Yunnan Xiyi Industrial are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Yunnan Xiyi sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and Yunnan Xiyi

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

The idea behind Citigroup and Yunnan Xiyi Industrial 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.