Correlation Between Citigroup and Topoint Technology
Can any of the company-specific risk be diversified away by investing in both Citigroup and Topoint Technology 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 Topoint Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Topoint Technology Co, you can compare the effects of market volatilities on Citigroup and Topoint Technology 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 Topoint Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Topoint Technology.
Diversification Opportunities for Citigroup and Topoint Technology
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and Topoint is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Topoint Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Topoint Technology 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 Topoint Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Topoint Technology has no effect on the direction of Citigroup i.e., Citigroup and Topoint Technology go up and down completely randomly.
Pair Corralation between Citigroup and Topoint Technology
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.9 times more return on investment than Topoint Technology. However, Citigroup is 1.11 times less risky than Topoint Technology. It trades about 0.09 of its potential returns per unit of risk. Topoint Technology Co is currently generating about -0.04 per unit of risk. If you would invest 6,543 in Citigroup on October 13, 2024 and sell it today you would earn a total of 597.00 from holding Citigroup or generate 9.12% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 95.38% |
Values | Daily Returns |
Citigroup vs. Topoint Technology Co
Performance |
Timeline |
Citigroup |
Topoint Technology |
Citigroup and Topoint Technology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Citigroup and Topoint Technology
The main advantage of trading using opposite Citigroup and Topoint Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Topoint Technology 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 Topoint Technology will offset losses from the drop in Topoint Technology's long position.Citigroup vs. Nu Holdings | ||
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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