Correlation Between Citigroup and Duyen Hai

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

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

Diversification Opportunities for Citigroup and Duyen Hai

-0.63

Correlation Coefficient

Citigroup  Duyen Hai

Excellent diversification

The 3 months correlation between Citigroup and Duyen is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Duyen Hai Multi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duyen Hai Multi 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 Duyen Hai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duyen Hai Multi has no effect on the direction of Citigroup i.e., Citigroup and Duyen Hai go up and down completely randomly.

Pair Corralation between Citigroup and Duyen Hai

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.66 times less return on investment than Duyen Hai. But when comparing it to its historical volatility, Citigroup is 2.37 times less risky than Duyen Hai. It trades about 0.09 of its potential returns per unit of risk. Duyen Hai Multi is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  935,000  in Duyen Hai Multi on October 7, 2024 and sell it today you would earn a total of  385,000  from holding Duyen Hai Multi or generate 41.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.56%
Values	Daily Returns

Citigroup  vs.  Duyen Hai Multi

Citigroup

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

Duyen Hai Multi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Duyen Hai Multi has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Citigroup and Duyen Hai

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

The idea behind Citigroup and Duyen Hai Multi 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.