Correlation Between Citigroup and Taewoong Logistics

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

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

Diversification Opportunities for Citigroup and Taewoong Logistics

-0.43

Correlation Coefficient

Citigroup  Taewoong Logistics

Very good diversification

The 3 months correlation between Citigroup and Taewoong is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Taewoong Logistics CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taewoong Logistics CoLtd 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 Taewoong Logistics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taewoong Logistics CoLtd has no effect on the direction of Citigroup i.e., Citigroup and Taewoong Logistics go up and down completely randomly.

Pair Corralation between Citigroup and Taewoong Logistics

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.6 times more return on investment than Taewoong Logistics. However, Citigroup is 1.67 times less risky than Taewoong Logistics. It trades about 0.07 of its potential returns per unit of risk. Taewoong Logistics CoLtd is currently generating about -0.01 per unit of risk. If you would invest  4,308  in Citigroup on September 26, 2024 and sell it today you would earn a total of  2,792  from holding Citigroup or generate 64.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	97.38%
Values	Daily Returns

Citigroup  vs.  Taewoong Logistics CoLtd

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.

Taewoong Logistics CoLtd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Taewoong Logistics CoLtd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Taewoong Logistics is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Citigroup and Taewoong Logistics

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

The idea behind Citigroup and Taewoong Logistics CoLtd 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.