Correlation Between Citigroup and Schweiter Technologies

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

Diversification Opportunities for Citigroup and Schweiter Technologies

0.16
  Correlation Coefficient

Average diversification

The 3 months correlation between Citigroup and Schweiter is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Schweiter Technologies AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schweiter Technologies 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 Schweiter Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schweiter Technologies has no effect on the direction of Citigroup i.e., Citigroup and Schweiter Technologies go up and down completely randomly.

Pair Corralation between Citigroup and Schweiter Technologies

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.49 times more return on investment than Schweiter Technologies. However, Citigroup is 2.04 times less risky than Schweiter Technologies. It trades about 0.18 of its potential returns per unit of risk. Schweiter Technologies AG is currently generating about 0.01 per unit of risk. If you would invest  6,900  in Citigroup on September 17, 2024 and sell it today you would earn a total of  201.00  from holding Citigroup or generate 2.91% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Citigroup  vs.  Schweiter Technologies AG

 Performance 
       Timeline  
Citigroup 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 12 (%) 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.
Schweiter Technologies 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Schweiter Technologies AG are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Schweiter Technologies is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Citigroup and Schweiter Technologies Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Citigroup and Schweiter Technologies

The main advantage of trading using opposite Citigroup and Schweiter Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Schweiter Technologies 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 Schweiter Technologies will offset losses from the drop in Schweiter Technologies' long position.
The idea behind Citigroup and Schweiter Technologies AG 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.

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