Correlation Between Citigroup and ATWEC Technologies

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

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

Diversification Opportunities for Citigroup and ATWEC Technologies

-0.73

Correlation Coefficient

Citigroup  ATWEC Technologies

Pay attention - limited upside

The 3 months correlation between Citigroup and ATWEC is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and ATWEC Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATWEC Technologies 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 ATWEC Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATWEC Technologies has no effect on the direction of Citigroup i.e., Citigroup and ATWEC Technologies go up and down completely randomly.

Pair Corralation between Citigroup and ATWEC Technologies

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.08 times more return on investment than ATWEC Technologies. However, Citigroup is 12.19 times less risky than ATWEC Technologies. It trades about 0.4 of its potential returns per unit of risk. ATWEC Technologies is currently generating about 0.01 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	Weak
Accuracy	100.0%
Values	Daily Returns

Citigroup  vs.  ATWEC Technologies

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.

ATWEC Technologies

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ATWEC Technologies are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal basic indicators, ATWEC Technologies unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and ATWEC Technologies

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

The idea behind Citigroup and ATWEC Technologies 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.