Correlation Between Citigroup and Tenet Fintech

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

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

Diversification Opportunities for Citigroup and Tenet Fintech

0.47

Correlation Coefficient

Citigroup  Tenet Fintech

Very weak diversification

The 3 months correlation between Citigroup and Tenet is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Tenet Fintech Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tenet Fintech Group 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 Tenet Fintech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tenet Fintech Group has no effect on the direction of Citigroup i.e., Citigroup and Tenet Fintech go up and down completely randomly.

Pair Corralation between Citigroup and Tenet Fintech

Taking into account the 90-day investment horizon Citigroup is expected to generate 2.12 times less return on investment than Tenet Fintech. But when comparing it to its historical volatility, Citigroup is 6.16 times less risky than Tenet Fintech. It trades about 0.09 of its potential returns per unit of risk. Tenet Fintech Group is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  5.80  in Tenet Fintech Group on September 21, 2024 and sell it today you would lose (0.80) from holding Tenet Fintech Group or give up 13.79% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Citigroup  vs.  Tenet Fintech Group

Citigroup

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Citigroup may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Tenet Fintech Group

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Tenet Fintech Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady technical and fundamental indicators, Tenet Fintech reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and Tenet Fintech

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

The idea behind Citigroup and Tenet Fintech Group 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 CEOs Directory module to screen CEOs from public companies around the world.