Correlation Between Citigroup and Nonthavej Hospital

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

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

Diversification Opportunities for Citigroup and Nonthavej Hospital

-0.37

Correlation Coefficient

Citigroup  Nonthavej Hospital

Very good diversification

The 3 months correlation between Citigroup and Nonthavej is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Nonthavej Hospital Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nonthavej Hospital Public 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 Nonthavej Hospital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nonthavej Hospital Public has no effect on the direction of Citigroup i.e., Citigroup and Nonthavej Hospital go up and down completely randomly.

Pair Corralation between Citigroup and Nonthavej Hospital

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.63 times more return on investment than Nonthavej Hospital. However, Citigroup is 1.63 times more volatile than Nonthavej Hospital Public. It trades about 0.04 of its potential returns per unit of risk. Nonthavej Hospital Public is currently generating about -0.02 per unit of risk. If you would invest  6,929  in Citigroup on December 23, 2024 and sell it today you would earn a total of  269.00  from holding Citigroup or generate 3.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.83%
Values	Daily Returns

Citigroup  vs.  Nonthavej Hospital Public

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 recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Nonthavej Hospital Public

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Citigroup and Nonthavej Hospital

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

The idea behind Citigroup and Nonthavej Hospital Public 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 Transaction History module to view history of all your transactions and understand their impact on performance.