Correlation Between Citigroup and TOPPS TILES

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

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

Diversification Opportunities for Citigroup and TOPPS TILES

-0.9

Correlation Coefficient

Citigroup  TOPPS TILES

Pay attention - limited upside

The 3 months correlation between Citigroup and TOPPS is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and TOPPS TILES PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TOPPS TILES PLC 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 TOPPS TILES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TOPPS TILES PLC has no effect on the direction of Citigroup i.e., Citigroup and TOPPS TILES go up and down completely randomly.

Pair Corralation between Citigroup and TOPPS TILES

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.47 times more return on investment than TOPPS TILES. However, Citigroup is 1.47 times more volatile than TOPPS TILES PLC. It trades about 0.4 of its potential returns per unit of risk. TOPPS TILES PLC is currently generating about -0.48 per unit of risk. If you would invest  7,135  in Citigroup on October 26, 2024 and sell it today you would earn a total of  1,034  from holding Citigroup or generate 14.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Citigroup  vs.  TOPPS TILES PLC

Citigroup

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 19 (%) 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.

TOPPS TILES PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TOPPS TILES PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Citigroup and TOPPS TILES

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

The idea behind Citigroup and TOPPS TILES PLC 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.