Correlation Between Citigroup and Taiwan Printed

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

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

Diversification Opportunities for Citigroup and Taiwan Printed

-0.56

Correlation Coefficient

Citigroup  Taiwan Printed

Excellent diversification

The 3 months correlation between Citigroup and Taiwan is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Taiwan Printed Circuit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiwan Printed Circuit 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 Taiwan Printed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiwan Printed Circuit has no effect on the direction of Citigroup i.e., Citigroup and Taiwan Printed go up and down completely randomly.

Pair Corralation between Citigroup and Taiwan Printed

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.3 times more return on investment than Taiwan Printed. However, Citigroup is 1.3 times more volatile than Taiwan Printed Circuit. It trades about -0.03 of its potential returns per unit of risk. Taiwan Printed Circuit is currently generating about -0.5 per unit of risk. If you would invest  6,984  in Citigroup on September 23, 2024 and sell it today you would lose (65.00) from holding Citigroup or give up 0.93% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Citigroup  vs.  Taiwan Printed Circuit

Citigroup

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Citigroup may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Taiwan Printed Circuit

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Taiwan Printed Circuit 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 Taiwan Printed

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

The idea behind Citigroup and Taiwan Printed Circuit 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 Stocks Directory module to find actively traded stocks across global markets.