Correlation Between Citigroup and Puda Coal

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

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

Diversification Opportunities for Citigroup and Puda Coal

0.0

Correlation Coefficient

Citigroup  Puda Coal

Pay attention - limited upside

The 3 months correlation between Citigroup and Puda is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Puda Coal New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Puda Coal New 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 Puda Coal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Puda Coal New has no effect on the direction of Citigroup i.e., Citigroup and Puda Coal go up and down completely randomly.

Pair Corralation between Citigroup and Puda Coal

If you would invest  6,543  in Citigroup on October 12, 2024 and sell it today you would earn a total of  783.00  from holding Citigroup or generate 11.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Citigroup  vs.  Puda Coal New

Citigroup

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental indicators, Citigroup may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Puda Coal New

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Puda Coal New has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, Puda Coal is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Citigroup and Puda Coal

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

The idea behind Citigroup and Puda Coal New 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.