Correlation Between Citigroup and Jardine Matheson

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

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

Diversification Opportunities for Citigroup and Jardine Matheson

-0.24

Correlation Coefficient

Citigroup  Jardine Matheson

Very good diversification

The 3 months correlation between Citigroup and Jardine is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Jardine Matheson Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jardine Matheson Holdings 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 Jardine Matheson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jardine Matheson Holdings has no effect on the direction of Citigroup i.e., Citigroup and Jardine Matheson go up and down completely randomly.

Pair Corralation between Citigroup and Jardine Matheson

Taking into account the 90-day investment horizon Citigroup is expected to generate 3.05 times less return on investment than Jardine Matheson. But when comparing it to its historical volatility, Citigroup is 1.58 times less risky than Jardine Matheson. It trades about 0.03 of its potential returns per unit of risk. Jardine Matheson Holdings is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  3,814  in Jardine Matheson Holdings on December 29, 2024 and sell it today you would earn a total of  331.00  from holding Jardine Matheson Holdings or generate 8.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	91.8%
Values	Daily Returns

Citigroup  vs.  Jardine Matheson Holdings

Citigroup

Risk-Adjusted Performance

Weak

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 newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Jardine Matheson Holdings

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Jardine Matheson Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating essential indicators, Jardine Matheson may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Citigroup and Jardine Matheson

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

The idea behind Citigroup and Jardine Matheson Holdings 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..