Correlation Between Citigroup and JuneYao Dairy

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

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

Diversification Opportunities for Citigroup and JuneYao Dairy

0.79

Correlation Coefficient

Citigroup  JuneYao Dairy

Poor diversification

The 3 months correlation between Citigroup and JuneYao is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and JuneYao Dairy Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JuneYao Dairy 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 JuneYao Dairy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JuneYao Dairy has no effect on the direction of Citigroup i.e., Citigroup and JuneYao Dairy go up and down completely randomly.

Pair Corralation between Citigroup and JuneYao Dairy

Taking into account the 90-day investment horizon Citigroup is expected to generate 2.97 times less return on investment than JuneYao Dairy. But when comparing it to its historical volatility, Citigroup is 1.83 times less risky than JuneYao Dairy. It trades about 0.15 of its potential returns per unit of risk. JuneYao Dairy Co is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  480.00  in JuneYao Dairy Co on September 5, 2024 and sell it today you would earn a total of  285.00  from holding JuneYao Dairy Co or generate 59.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	92.06%
Values	Daily Returns

Citigroup  vs.  JuneYao Dairy Co

Citigroup

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 11 (%) 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.

JuneYao Dairy

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in JuneYao Dairy Co are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, JuneYao Dairy sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and JuneYao Dairy

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

The idea behind Citigroup and JuneYao Dairy 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.