Correlation Between Citigroup and Jiangsu Yike

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

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

Diversification Opportunities for Citigroup and Jiangsu Yike

-0.3

Correlation Coefficient

Citigroup  Jiangsu Yike

Very good diversification

The 3 months correlation between Citigroup and Jiangsu is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Jiangsu Yike Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu Yike Food 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 Jiangsu Yike. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu Yike Food has no effect on the direction of Citigroup i.e., Citigroup and Jiangsu Yike go up and down completely randomly.

Pair Corralation between Citigroup and Jiangsu Yike

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.89 times more return on investment than Jiangsu Yike. However, Citigroup is 1.12 times less risky than Jiangsu Yike. It trades about 0.03 of its potential returns per unit of risk. Jiangsu Yike Food is currently generating about -0.12 per unit of risk. If you would invest  7,051  in Citigroup on December 24, 2024 and sell it today you would earn a total of  147.00  from holding Citigroup or generate 2.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.67%
Values	Daily Returns

Citigroup  vs.  Jiangsu Yike Food

Citigroup

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 2 (%) 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.

Jiangsu Yike Food

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jiangsu Yike Food has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Citigroup and Jiangsu Yike

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

The idea behind Citigroup and Jiangsu Yike Food 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.

Check out your portfolio center.

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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.