Correlation Between Citigroup and Jakpaisan Estate

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

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

Diversification Opportunities for Citigroup and Jakpaisan Estate

0.47

Correlation Coefficient

Citigroup  Jakpaisan Estate

Very weak diversification

The 3 months correlation between Citigroup and Jakpaisan is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Jakpaisan Estate Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jakpaisan Estate Public 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 Jakpaisan Estate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jakpaisan Estate Public has no effect on the direction of Citigroup i.e., Citigroup and Jakpaisan Estate go up and down completely randomly.

Pair Corralation between Citigroup and Jakpaisan Estate

Taking into account the 90-day investment horizon Citigroup is expected to generate 3.42 times less return on investment than Jakpaisan Estate. But when comparing it to its historical volatility, Citigroup is 5.33 times less risky than Jakpaisan Estate. It trades about 0.16 of its potential returns per unit of risk. Jakpaisan Estate Public is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  121.00  in Jakpaisan Estate Public on September 26, 2024 and sell it today you would earn a total of  25.00  from holding Jakpaisan Estate Public or generate 20.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	82.93%
Values	Daily Returns

Citigroup  vs.  Jakpaisan Estate Public

Citigroup

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 10 (%) 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.

Jakpaisan Estate Public

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Jakpaisan Estate Public are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite weak forward-looking signals, Jakpaisan Estate disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and Jakpaisan Estate

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

The idea behind Citigroup and Jakpaisan Estate Public 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.