Correlation Between Citigroup and Taiwan Hopax
Can any of the company-specific risk be diversified away by investing in both Citigroup and Taiwan Hopax 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 Taiwan Hopax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Taiwan Hopax Chemsistry, you can compare the effects of market volatilities on Citigroup and Taiwan Hopax 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 Taiwan Hopax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Taiwan Hopax.
Diversification Opportunities for Citigroup and Taiwan Hopax
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Citigroup and Taiwan is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Taiwan Hopax Chemsistry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiwan Hopax Chemsistry 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 Taiwan Hopax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiwan Hopax Chemsistry has no effect on the direction of Citigroup i.e., Citigroup and Taiwan Hopax go up and down completely randomly.
Pair Corralation between Citigroup and Taiwan Hopax
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.51 times more return on investment than Taiwan Hopax. However, Citigroup is 1.51 times more volatile than Taiwan Hopax Chemsistry. It trades about 0.12 of its potential returns per unit of risk. Taiwan Hopax Chemsistry is currently generating about -0.01 per unit of risk. If you would invest 6,247 in Citigroup on September 19, 2024 and sell it today you would earn a total of 865.00 from holding Citigroup or generate 13.85% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Citigroup vs. Taiwan Hopax Chemsistry
Performance |
Timeline |
Citigroup |
Taiwan Hopax Chemsistry |
Citigroup and Taiwan Hopax Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Citigroup and Taiwan Hopax
The main advantage of trading using opposite Citigroup and Taiwan Hopax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Taiwan Hopax 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 Taiwan Hopax will offset losses from the drop in Taiwan Hopax's long position.Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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