Correlation Between Citigroup and HUA YU

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

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

Diversification Opportunities for Citigroup and HUA YU

0.03

Correlation Coefficient

Citigroup  HUA YU

Significant diversification

The 3 months correlation between Citigroup and HUA is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and HUA YU LIEN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUA YU LIEN 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 HUA YU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUA YU LIEN has no effect on the direction of Citigroup i.e., Citigroup and HUA YU go up and down completely randomly.

Pair Corralation between Citigroup and HUA YU

Taking into account the 90-day investment horizon Citigroup is expected to generate 2.44 times less return on investment than HUA YU. In addition to that, Citigroup is 1.08 times more volatile than HUA YU LIEN. It trades about 0.01 of its total potential returns per unit of risk. HUA YU LIEN is currently generating about 0.04 per unit of volatility. If you would invest  12,600  in HUA YU LIEN on December 28, 2024 and sell it today you would earn a total of  400.00  from holding HUA YU LIEN or generate 3.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	91.8%
Values	Daily Returns

Citigroup  vs.  HUA YU LIEN

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.

HUA YU LIEN

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in HUA YU LIEN are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, HUA YU is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Citigroup and HUA YU

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

The idea behind Citigroup and HUA YU LIEN 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.