Correlation Between Citigroup and Orient Semiconductor

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

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

Diversification Opportunities for Citigroup and Orient Semiconductor

-0.79

Correlation Coefficient

Citigroup  Orient Semiconductor

Pay attention - limited upside

The 3 months correlation between Citigroup and Orient is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Orient Semiconductor Electroni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orient Semiconductor 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 Orient Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orient Semiconductor has no effect on the direction of Citigroup i.e., Citigroup and Orient Semiconductor go up and down completely randomly.

Pair Corralation between Citigroup and Orient Semiconductor

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.73 times more return on investment than Orient Semiconductor. However, Citigroup is 1.36 times less risky than Orient Semiconductor. It trades about -0.04 of its potential returns per unit of risk. Orient Semiconductor Electronics is currently generating about -0.21 per unit of risk. If you would invest  7,186  in Citigroup on October 8, 2024 and sell it today you would lose (86.00) from holding Citigroup or give up 1.2% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.0%
Values	Daily Returns

Citigroup  vs.  Orient Semiconductor Electroni

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

Orient Semiconductor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Orient Semiconductor Electronics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Citigroup and Orient Semiconductor

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

The idea behind Citigroup and Orient Semiconductor Electronics 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.