Correlation Between Citigroup and Namwiwat Medical

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

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

Diversification Opportunities for Citigroup and Namwiwat Medical

-0.23

Correlation Coefficient

Citigroup  Namwiwat Medical

Very good diversification

The 3 months correlation between Citigroup and Namwiwat is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Namwiwat Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Namwiwat Medical 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 Namwiwat Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Namwiwat Medical has no effect on the direction of Citigroup i.e., Citigroup and Namwiwat Medical go up and down completely randomly.

Pair Corralation between Citigroup and Namwiwat Medical

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.29 times more return on investment than Namwiwat Medical. However, Citigroup is 1.29 times more volatile than Namwiwat Medical. It trades about 0.04 of its potential returns per unit of risk. Namwiwat Medical is currently generating about -0.02 per unit of risk. If you would invest  7,051  in Citigroup on December 27, 2024 and sell it today you would earn a total of  273.00  from holding Citigroup or generate 3.87% return on investment over 90 days.

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

Citigroup  vs.  Namwiwat Medical

Citigroup

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Citigroup is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Namwiwat Medical

Risk-Adjusted Performance

Very Weak

Over the last 90 days Namwiwat Medical has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent primary indicators, Namwiwat Medical is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Citigroup and Namwiwat Medical

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

The idea behind Citigroup and Namwiwat Medical 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.