Correlation Between Citigroup and Qingdao Gon

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

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

Diversification Opportunities for Citigroup and Qingdao Gon

-0.25

Correlation Coefficient

Citigroup  Qingdao Gon

Very good diversification

The 3 months correlation between Citigroup and Qingdao is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Qingdao Gon Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qingdao Gon Technology 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 Qingdao Gon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qingdao Gon Technology has no effect on the direction of Citigroup i.e., Citigroup and Qingdao Gon go up and down completely randomly.

Pair Corralation between Citigroup and Qingdao Gon

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.62 times less return on investment than Qingdao Gon. But when comparing it to its historical volatility, Citigroup is 1.02 times less risky than Qingdao Gon. It trades about 0.05 of its potential returns per unit of risk. Qingdao Gon Technology is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  2,307  in Qingdao Gon Technology on December 24, 2024 and sell it today you would earn a total of  197.00  from holding Qingdao Gon Technology or generate 8.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.08%
Values	Daily Returns

Citigroup  vs.  Qingdao Gon Technology

Citigroup

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 3 (%) 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 recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Qingdao Gon Technology

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Qingdao Gon Technology are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Qingdao Gon may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Citigroup and Qingdao Gon

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

The idea behind Citigroup and Qingdao Gon Technology 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.