Correlation Between Citigroup and Borqs Technologies

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

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

Diversification Opportunities for Citigroup and Borqs Technologies

-0.83

Correlation Coefficient

Citigroup  Borqs Technologies

Pay attention - limited upside

The 3 months correlation between Citigroup and Borqs is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Borqs Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Borqs 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 Borqs Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Borqs Technologies has no effect on the direction of Citigroup i.e., Citigroup and Borqs Technologies go up and down completely randomly.

Pair Corralation between Citigroup and Borqs Technologies

If you would invest  4,567  in Citigroup on September 27, 2024 and sell it today you would earn a total of  2,533  from holding Citigroup or generate 55.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	0.37%
Values	Daily Returns

Citigroup  vs.  Borqs Technologies

Citigroup

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

Borqs Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Borqs Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Borqs Technologies is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Citigroup and Borqs Technologies

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

The idea behind Citigroup and Borqs 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.

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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.