Correlation Between Citigroup and My Chau

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

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

Diversification Opportunities for Citigroup and My Chau

0.53

Correlation Coefficient

Citigroup  My Chau

Very weak diversification

The 3 months correlation between Citigroup and MCP is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and My Chau Printing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on My Chau Printing 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 My Chau. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of My Chau Printing has no effect on the direction of Citigroup i.e., Citigroup and My Chau go up and down completely randomly.

Pair Corralation between Citigroup and My Chau

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.5 times more return on investment than My Chau. However, Citigroup is 2.01 times less risky than My Chau. It trades about 0.15 of its potential returns per unit of risk. My Chau Printing is currently generating about 0.06 per unit of risk. If you would invest  6,369  in Citigroup on September 16, 2024 and sell it today you would earn a total of  732.00  from holding Citigroup or generate 11.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	97.73%
Values	Daily Returns

Citigroup  vs.  My Chau Printing

Citigroup

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 13 (%) 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.

My Chau Printing

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in My Chau Printing are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, My Chau may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Citigroup and My Chau

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

The idea behind Citigroup and My Chau Printing 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.