Correlation Between Citigroup and THC Biomed

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

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

Diversification Opportunities for Citigroup and THC Biomed

-0.53

Correlation Coefficient

Citigroup  THC Biomed

Excellent diversification

The 3 months correlation between Citigroup and THC is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and THC Biomed Intl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THC Biomed Intl 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 THC Biomed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of THC Biomed Intl has no effect on the direction of Citigroup i.e., Citigroup and THC Biomed go up and down completely randomly.

Pair Corralation between Citigroup and THC Biomed

If you would invest  7,250  in Citigroup on October 11, 2024 and sell it today you would earn a total of  76.00  from holding Citigroup or generate 1.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Citigroup  vs.  THC Biomed Intl

Citigroup

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

THC Biomed Intl

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days THC Biomed Intl has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's fundamental drivers remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Citigroup and THC Biomed

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

The idea behind Citigroup and THC Biomed Intl 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 Stocks Directory module to find actively traded stocks across global markets.