Correlation Between Citigroup and Takuni Group

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

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

Diversification Opportunities for Citigroup and Takuni Group

-0.91

Correlation Coefficient

Citigroup  Takuni Group

Pay attention - limited upside

The 3 months correlation between Citigroup and Takuni is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Takuni Group Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Takuni Group Public 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 Takuni Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Takuni Group Public has no effect on the direction of Citigroup i.e., Citigroup and Takuni Group go up and down completely randomly.

Pair Corralation between Citigroup and Takuni Group

Taking into account the 90-day investment horizon Citigroup is expected to generate 13.01 times less return on investment than Takuni Group. But when comparing it to its historical volatility, Citigroup is 28.32 times less risky than Takuni Group. It trades about 0.08 of its potential returns per unit of risk. Takuni Group Public is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  300.00  in Takuni Group Public on September 14, 2024 and sell it today you would lose (234.00) from holding Takuni Group Public or give up 78.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	96.97%
Values	Daily Returns

Citigroup  vs.  Takuni Group Public

Citigroup

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 14 (%) 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.

Takuni Group Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Takuni Group Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward-looking signals remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Citigroup and Takuni Group

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

The idea behind Citigroup and Takuni Group Public 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.