Correlation Between Citigroup and Miniso Group

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

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

Diversification Opportunities for Citigroup and Miniso Group

0.64

Correlation Coefficient

Citigroup  Miniso Group

Poor diversification

The 3 months correlation between Citigroup and Miniso is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Miniso Group Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Miniso Group Holding 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 Miniso Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Miniso Group Holding has no effect on the direction of Citigroup i.e., Citigroup and Miniso Group go up and down completely randomly.

Pair Corralation between Citigroup and Miniso Group

Taking into account the 90-day investment horizon Citigroup is expected to generate 68.25 times less return on investment than Miniso Group. But when comparing it to its historical volatility, Citigroup is 4.03 times less risky than Miniso Group. It trades about 0.02 of its potential returns per unit of risk. Miniso Group Holding is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest  1,699  in Miniso Group Holding on September 22, 2024 and sell it today you would earn a total of  635.00  from holding Miniso Group Holding or generate 37.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Citigroup  vs.  Miniso Group Holding

Citigroup

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Citigroup may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Miniso Group Holding

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Miniso Group Holding are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Miniso Group displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and Miniso Group

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

The idea behind Citigroup and Miniso Group Holding 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.