Correlation Between Citigroup and Ying Han

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

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

Diversification Opportunities for Citigroup and Ying Han

-0.02

Correlation Coefficient

Citigroup  Ying Han

Good diversification

The 3 months correlation between Citigroup and Ying is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Ying Han Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ying Han Technology 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 Ying Han. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ying Han Technology has no effect on the direction of Citigroup i.e., Citigroup and Ying Han go up and down completely randomly.

Pair Corralation between Citigroup and Ying Han

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.28 times less return on investment than Ying Han. But when comparing it to its historical volatility, Citigroup is 1.97 times less risky than Ying Han. It trades about 0.12 of its potential returns per unit of risk. Ying Han Technology is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  6,170  in Ying Han Technology on September 24, 2024 and sell it today you would earn a total of  970.00  from holding Ying Han Technology or generate 15.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Citigroup  vs.  Ying Han Technology

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 uncertain fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

Ying Han Technology

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ying Han Technology are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Ying Han showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and Ying Han

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

The idea behind Citigroup and Ying Han Technology 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.