Correlation Between Citigroup and Tangel Publishing

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

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

Diversification Opportunities for Citigroup and Tangel Publishing

-0.37

Correlation Coefficient

Citigroup  Tangel Publishing

Very good diversification

The 3 months correlation between Citigroup and Tangel is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Tangel Publishing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tangel Publishing 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 Tangel Publishing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tangel Publishing has no effect on the direction of Citigroup i.e., Citigroup and Tangel Publishing go up and down completely randomly.

Pair Corralation between Citigroup and Tangel Publishing

Taking into account the 90-day investment horizon Citigroup is expected to generate 3.25 times less return on investment than Tangel Publishing. But when comparing it to its historical volatility, Citigroup is 2.3 times less risky than Tangel Publishing. It trades about 0.04 of its potential returns per unit of risk. Tangel Publishing is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  411.00  in Tangel Publishing on December 23, 2024 and sell it today you would earn a total of  43.00  from holding Tangel Publishing or generate 10.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.72%
Values	Daily Returns

Citigroup  vs.  Tangel Publishing

Citigroup

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Citigroup is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Tangel Publishing

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Tangel Publishing are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Tangel Publishing sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and Tangel Publishing

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

The idea behind Citigroup and Tangel Publishing 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.