Correlation Between Citigroup and Chang Type

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

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

Diversification Opportunities for Citigroup and Chang Type

-0.89

Correlation Coefficient

Citigroup  Chang Type

Pay attention - limited upside

The 3 months correlation between Citigroup and Chang is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Chang Type Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chang Type Industrial 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 Chang Type. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chang Type Industrial has no effect on the direction of Citigroup i.e., Citigroup and Chang Type go up and down completely randomly.

Pair Corralation between Citigroup and Chang Type

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.47 times more return on investment than Chang Type. However, Citigroup is 1.47 times more volatile than Chang Type Industrial. It trades about 0.1 of its potential returns per unit of risk. Chang Type Industrial is currently generating about -0.33 per unit of risk. If you would invest  6,203  in Citigroup on September 23, 2024 and sell it today you would earn a total of  716.00  from holding Citigroup or generate 11.54% return on investment over 90 days.

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

Citigroup  vs.  Chang Type Industrial

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 uncertain fundamental indicators, Citigroup may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Chang Type Industrial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chang Type Industrial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Citigroup and Chang Type

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

The idea behind Citigroup and Chang Type Industrial 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.