Correlation Between Citigroup and T1SC34

Can any of the company-specific risk be diversified away by investing in both Citigroup and T1SC34 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 T1SC34 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Citigroup and T1SC34, you can compare the effects of market volatilities on Citigroup and T1SC34 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 T1SC34. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and T1SC34.

Diversification Opportunities for Citigroup and T1SC34

0.42

Correlation Coefficient

Citigroup  T1SC34

Very weak diversification

The 3 months correlation between Citigroup and T1SC34 is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and T1SC34 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T1SC34 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 T1SC34. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T1SC34 has no effect on the direction of Citigroup i.e., Citigroup and T1SC34 go up and down completely randomly.

Pair Corralation between Citigroup and T1SC34

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.06 times less return on investment than T1SC34. In addition to that, Citigroup is 1.01 times more volatile than T1SC34. It trades about 0.07 of its total potential returns per unit of risk. T1SC34 is currently generating about 0.07 per unit of volatility. If you would invest  1,631  in T1SC34 on September 27, 2024 and sell it today you would earn a total of  257.00  from holding T1SC34 or generate 15.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Citigroup  vs.  T1SC34

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.

T1SC34

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in T1SC34 are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, T1SC34 may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Citigroup and T1SC34

The main advantage of trading using opposite Citigroup and T1SC34 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, T1SC34 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 T1SC34 will offset losses from the drop in T1SC34's long position.

The idea behind Citigroup and T1SC34 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.