Correlation Between Citigroup and Dnonce Tech

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

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

Diversification Opportunities for Citigroup and Dnonce Tech

0.61

Correlation Coefficient

Citigroup  Dnonce Tech

Poor diversification

The 3 months correlation between Citigroup and Dnonce is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Dnonce Tech Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dnonce Tech Bhd 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 Dnonce Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dnonce Tech Bhd has no effect on the direction of Citigroup i.e., Citigroup and Dnonce Tech go up and down completely randomly.

Pair Corralation between Citigroup and Dnonce Tech

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.31 times more return on investment than Dnonce Tech. However, Citigroup is 3.18 times less risky than Dnonce Tech. It trades about 0.01 of its potential returns per unit of risk. Dnonce Tech Bhd is currently generating about -0.1 per unit of risk. If you would invest  6,991  in Citigroup on December 30, 2024 and sell it today you would earn a total of  42.00  from holding Citigroup or generate 0.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

Citigroup  vs.  Dnonce Tech Bhd

Citigroup

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 1 (%) 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 newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Dnonce Tech Bhd

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dnonce Tech Bhd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Citigroup and Dnonce Tech

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

The idea behind Citigroup and Dnonce Tech Bhd 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.

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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.