Correlation Between Citigroup and Tfa Tactical

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

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

Diversification Opportunities for Citigroup and Tfa Tactical

-0.36

Correlation Coefficient

Citigroup  Tfa Tactical

Very good diversification

The 3 months correlation between Citigroup and Tfa is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Tfa Tactical Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tfa Tactical Income 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 Tfa Tactical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tfa Tactical Income has no effect on the direction of Citigroup i.e., Citigroup and Tfa Tactical go up and down completely randomly.

Pair Corralation between Citigroup and Tfa Tactical

Taking into account the 90-day investment horizon Citigroup is expected to generate 5.8 times more return on investment than Tfa Tactical. However, Citigroup is 5.8 times more volatile than Tfa Tactical Income. It trades about 0.11 of its potential returns per unit of risk. Tfa Tactical Income is currently generating about 0.03 per unit of risk. If you would invest  4,788  in Citigroup on September 12, 2024 and sell it today you would earn a total of  2,462  from holding Citigroup or generate 51.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.6%
Values	Daily Returns

Citigroup  vs.  Tfa Tactical Income

Citigroup

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 16 (%) 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.

Tfa Tactical Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tfa Tactical Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Tfa Tactical is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Citigroup and Tfa Tactical

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

The idea behind Citigroup and Tfa Tactical Income 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.