Correlation Between Citigroup and Mobase Electronics

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

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

Diversification Opportunities for Citigroup and Mobase Electronics

-0.19

Correlation Coefficient

Citigroup  Mobase Electronics

Good diversification

The 3 months correlation between Citigroup and Mobase is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Mobase Electronics CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mobase Electronics 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 Mobase Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mobase Electronics CoLtd has no effect on the direction of Citigroup i.e., Citigroup and Mobase Electronics go up and down completely randomly.

Pair Corralation between Citigroup and Mobase Electronics

Taking into account the 90-day investment horizon Citigroup is expected to generate 3.82 times less return on investment than Mobase Electronics. In addition to that, Citigroup is 1.13 times more volatile than Mobase Electronics CoLtd. It trades about 0.01 of its total potential returns per unit of risk. Mobase Electronics CoLtd is currently generating about 0.06 per unit of volatility. If you would invest  136,100  in Mobase Electronics CoLtd on December 30, 2024 and sell it today you would earn a total of  8,000  from holding Mobase Electronics CoLtd or generate 5.88% return on investment over 90 days.

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

Citigroup  vs.  Mobase Electronics CoLtd

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.

Mobase Electronics CoLtd

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mobase Electronics CoLtd are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Mobase Electronics may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Citigroup and Mobase Electronics

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

The idea behind Citigroup and Mobase Electronics CoLtd 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.