Correlation Between Citigroup and Tiziana Life

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

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

Diversification Opportunities for Citigroup and Tiziana Life

-0.44

Correlation Coefficient

Citigroup  Tiziana Life

Very good diversification

The 3 months correlation between Citigroup and Tiziana is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Tiziana Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tiziana Life Sciences 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 Tiziana Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tiziana Life Sciences has no effect on the direction of Citigroup i.e., Citigroup and Tiziana Life go up and down completely randomly.

Pair Corralation between Citigroup and Tiziana Life

Taking into account the 90-day investment horizon Citigroup is expected to generate 16.89 times less return on investment than Tiziana Life. But when comparing it to its historical volatility, Citigroup is 3.72 times less risky than Tiziana Life. It trades about 0.04 of its potential returns per unit of risk. Tiziana Life Sciences is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  68.00  in Tiziana Life Sciences on December 21, 2024 and sell it today you would earn a total of  61.00  from holding Tiziana Life Sciences or generate 89.71% return on investment over 90 days.

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

Citigroup  vs.  Tiziana Life Sciences

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.

Tiziana Life Sciences

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tiziana Life Sciences are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Tiziana Life sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and Tiziana Life

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

The idea behind Citigroup and Tiziana Life Sciences 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.