Correlation Between Citigroup and Can2 Termik

Can any of the company-specific risk be diversified away by investing in both Citigroup and Can2 Termik 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 Can2 Termik into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Citigroup and Can2 Termik AS, you can compare the effects of market volatilities on Citigroup and Can2 Termik 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 Can2 Termik. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Can2 Termik.

Diversification Opportunities for Citigroup and Can2 Termik

0.76

Correlation Coefficient

Citigroup  Can2 Termik

Poor diversification

The 3 months correlation between Citigroup and Can2 is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Can2 Termik AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Can2 Termik AS 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 Can2 Termik. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Can2 Termik AS has no effect on the direction of Citigroup i.e., Citigroup and Can2 Termik go up and down completely randomly.

Pair Corralation between Citigroup and Can2 Termik

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.91 times more return on investment than Can2 Termik. However, Citigroup is 1.1 times less risky than Can2 Termik. It trades about 0.23 of its potential returns per unit of risk. Can2 Termik AS is currently generating about 0.15 per unit of risk. If you would invest  6,255  in Citigroup on October 23, 2024 and sell it today you would earn a total of  1,744  from holding Citigroup or generate 27.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	96.77%
Values	Daily Returns

Citigroup  vs.  Can2 Termik AS

Citigroup

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 18 (%) 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.

Can2 Termik AS

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Can2 Termik AS are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Can2 Termik demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and Can2 Termik

The main advantage of trading using opposite Citigroup and Can2 Termik positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Can2 Termik 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 Can2 Termik will offset losses from the drop in Can2 Termik's long position.

The idea behind Citigroup and Can2 Termik AS 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.