Correlation Between Citigroup and Sichuan Chuantou
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By analyzing existing cross correlation between Citigroup and Sichuan Chuantou Energy, you can compare the effects of market volatilities on Citigroup and Sichuan Chuantou 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 Sichuan Chuantou. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Sichuan Chuantou.
Diversification Opportunities for Citigroup and Sichuan Chuantou
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and Sichuan is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Sichuan Chuantou Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sichuan Chuantou Energy 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 Sichuan Chuantou. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sichuan Chuantou Energy has no effect on the direction of Citigroup i.e., Citigroup and Sichuan Chuantou go up and down completely randomly.
Pair Corralation between Citigroup and Sichuan Chuantou
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.08 times more return on investment than Sichuan Chuantou. However, Citigroup is 1.08 times more volatile than Sichuan Chuantou Energy. It trades about 0.12 of its potential returns per unit of risk. Sichuan Chuantou Energy is currently generating about -0.06 per unit of risk. If you would invest 6,083 in Citigroup on September 24, 2024 and sell it today you would earn a total of 894.00 from holding Citigroup or generate 14.7% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 92.31% |
Values | Daily Returns |
Citigroup vs. Sichuan Chuantou Energy
Performance |
Timeline |
Citigroup |
Sichuan Chuantou Energy |
Citigroup and Sichuan Chuantou Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Citigroup and Sichuan Chuantou
The main advantage of trading using opposite Citigroup and Sichuan Chuantou positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Sichuan Chuantou 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 Sichuan Chuantou will offset losses from the drop in Sichuan Chuantou's long position.The idea behind Citigroup and Sichuan Chuantou Energy 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.Sichuan Chuantou vs. Chengdu Kanghua Biological | Sichuan Chuantou vs. Beijing Wantai Biological | Sichuan Chuantou vs. Suzhou Novoprotein Scientific | Sichuan Chuantou vs. Aluminum Corp of |
Check out your portfolio center.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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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