Correlation Between TSINGTAO H and Citigroup
Can any of the company-specific risk be diversified away by investing in both TSINGTAO H and Citigroup 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 TSINGTAO H and Citigroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TSINGTAO H and Citigroup, you can compare the effects of market volatilities on TSINGTAO H and Citigroup 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 TSINGTAO H with a short position of Citigroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of TSINGTAO H and Citigroup.
Diversification Opportunities for TSINGTAO H and Citigroup
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between TSINGTAO and Citigroup is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding TSINGTAO H and Citigroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citigroup and TSINGTAO H 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 TSINGTAO H are associated (or correlated) with Citigroup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citigroup has no effect on the direction of TSINGTAO H i.e., TSINGTAO H and Citigroup go up and down completely randomly.
Pair Corralation between TSINGTAO H and Citigroup
Assuming the 90 days trading horizon TSINGTAO H is expected to generate 1.28 times more return on investment than Citigroup. However, TSINGTAO H is 1.28 times more volatile than Citigroup. It trades about 0.14 of its potential returns per unit of risk. Citigroup is currently generating about 0.08 per unit of risk. If you would invest 616.00 in TSINGTAO H on January 25, 2024 and sell it today you would earn a total of 37.00 from holding TSINGTAO H or generate 6.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
TSINGTAO H vs. Citigroup
Performance |
| Timeline |
| TSINGTAO H |
| Citigroup |
TSINGTAO H and Citigroup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TSINGTAO H and Citigroup
The main advantage of trading using opposite TSINGTAO H and Citigroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TSINGTAO H position performs unexpectedly, Citigroup 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 Citigroup will offset losses from the drop in Citigroup's long position.| TSINGTAO H vs. PANIN INSURANCE | TSINGTAO H vs. National Health Investors | TSINGTAO H vs. Reinsurance Group of | TSINGTAO H vs. Universal Insurance Holdings |
| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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