Correlation Between Citigroup and Shenzhen Hans

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

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

Diversification Opportunities for Citigroup and Shenzhen Hans

-0.27

Correlation Coefficient

Citigroup  Shenzhen Hans

Very good diversification

The 3 months correlation between Citigroup and Shenzhen is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Shenzhen Hans CNC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Hans CNC 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 Shenzhen Hans. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Hans CNC has no effect on the direction of Citigroup i.e., Citigroup and Shenzhen Hans go up and down completely randomly.

Pair Corralation between Citigroup and Shenzhen Hans

Taking into account the 90-day investment horizon Citigroup is expected to generate 5.99 times less return on investment than Shenzhen Hans. But when comparing it to its historical volatility, Citigroup is 1.18 times less risky than Shenzhen Hans. It trades about 0.01 of its potential returns per unit of risk. Shenzhen Hans CNC is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  3,708  in Shenzhen Hans CNC on December 28, 2024 and sell it today you would earn a total of  339.00  from holding Shenzhen Hans CNC or generate 9.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.08%
Values	Daily Returns

Citigroup  vs.  Shenzhen Hans CNC

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.

Shenzhen Hans CNC

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Shenzhen Hans CNC are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Shenzhen Hans may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Citigroup and Shenzhen Hans

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

The idea behind Citigroup and Shenzhen Hans CNC 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.