Correlation Between Citigroup and Da Cin

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

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

Diversification Opportunities for Citigroup and Da Cin

0.16

Correlation Coefficient

Citigroup  Da Cin

Average diversification

The 3 months correlation between Citigroup and 2535 is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Da Cin Construction Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Da Cin Construction 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 Da Cin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Da Cin Construction has no effect on the direction of Citigroup i.e., Citigroup and Da Cin go up and down completely randomly.

Pair Corralation between Citigroup and Da Cin

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.11 times less return on investment than Da Cin. In addition to that, Citigroup is 1.01 times more volatile than Da Cin Construction Co. It trades about 0.08 of its total potential returns per unit of risk. Da Cin Construction Co is currently generating about 0.09 per unit of volatility. If you would invest  2,965  in Da Cin Construction Co on September 16, 2024 and sell it today you would earn a total of  2,465  from holding Da Cin Construction Co or generate 83.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.98%
Values	Daily Returns

Citigroup  vs.  Da Cin Construction Co

Citigroup

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 13 (%) 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.

Da Cin Construction

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Da Cin Construction Co are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Da Cin 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 Da Cin

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

The idea behind Citigroup and Da Cin Construction Co 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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.