Correlation Between Citigroup and Wintao Communications

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Citigroup and Wintao Communications 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 Wintao Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Wintao Communications Co, you can compare the effects of market volatilities on Citigroup and Wintao Communications 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 Wintao Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Wintao Communications.

Diversification Opportunities for Citigroup and Wintao Communications

0.73
  Correlation Coefficient

Poor diversification

The 3 months correlation between Citigroup and Wintao is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Wintao Communications Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wintao Communications 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 Wintao Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wintao Communications has no effect on the direction of Citigroup i.e., Citigroup and Wintao Communications go up and down completely randomly.

Pair Corralation between Citigroup and Wintao Communications

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.93 times less return on investment than Wintao Communications. But when comparing it to its historical volatility, Citigroup is 2.0 times less risky than Wintao Communications. It trades about 0.15 of its potential returns per unit of risk. Wintao Communications Co is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  1,947  in Wintao Communications Co on September 5, 2024 and sell it today you would earn a total of  629.00  from holding Wintao Communications Co or generate 32.31% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy90.63%
ValuesDaily Returns

Citigroup  vs.  Wintao Communications Co

 Performance 
       Timeline  
Citigroup 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 11 (%) 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.
Wintao Communications 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Wintao Communications Co are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Wintao Communications sustained solid returns over the last few months and may actually be approaching a breakup point.

Citigroup and Wintao Communications Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Citigroup and Wintao Communications

The main advantage of trading using opposite Citigroup and Wintao Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Wintao Communications 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 Wintao Communications will offset losses from the drop in Wintao Communications' long position.
The idea behind Citigroup and Wintao Communications Co 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.

Other Complementary Tools

Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio
Crypto Correlations
Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins
Portfolio Dashboard
Portfolio dashboard that provides centralized access to all your investments
Portfolio Diagnostics
Use generated alerts and portfolio events aggregator to diagnose current holdings
Earnings Calls
Check upcoming earnings announcements updated hourly across public exchanges