Correlation Between Citigroup and Mirae Asset

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

By analyzing existing cross correlation between Citigroup and Mirae Asset No2, you can compare the effects of market volatilities on Citigroup and Mirae Asset 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 Mirae Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Mirae Asset.

Diversification Opportunities for Citigroup and Mirae Asset

0.47

Correlation Coefficient

Citigroup  Mirae Asset

Very weak diversification

The 3 months correlation between Citigroup and Mirae is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Mirae Asset No2 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mirae Asset No2 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 Mirae Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mirae Asset No2 has no effect on the direction of Citigroup i.e., Citigroup and Mirae Asset go up and down completely randomly.

Pair Corralation between Citigroup and Mirae Asset

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.84 times more return on investment than Mirae Asset. However, Citigroup is 1.19 times less risky than Mirae Asset. It trades about 0.13 of its potential returns per unit of risk. Mirae Asset No2 is currently generating about 0.02 per unit of risk. If you would invest  7,038  in Citigroup on November 29, 2024 and sell it today you would earn a total of  869.00  from holding Citigroup or generate 12.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.31%
Values	Daily Returns

Citigroup  vs.  Mirae Asset No2

Citigroup

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 10 (%) 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.

Mirae Asset No2

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mirae Asset No2 are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Mirae Asset 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 Mirae Asset

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

The idea behind Citigroup and Mirae Asset No2 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.