Correlation Between Citigroup and Trinity Watthana

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

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

Diversification Opportunities for Citigroup and Trinity Watthana

0.81

Correlation Coefficient

Citigroup  Trinity Watthana

Very poor diversification

The 3 months correlation between Citigroup and Trinity is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Trinity Watthana Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trinity Watthana 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 Trinity Watthana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trinity Watthana Public has no effect on the direction of Citigroup i.e., Citigroup and Trinity Watthana go up and down completely randomly.

Pair Corralation between Citigroup and Trinity Watthana

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.3 times more return on investment than Trinity Watthana. However, Citigroup is 3.28 times less risky than Trinity Watthana. It trades about 0.02 of its potential returns per unit of risk. Trinity Watthana Public is currently generating about -0.02 per unit of risk. If you would invest  7,075  in Citigroup on September 25, 2024 and sell it today you would earn a total of  25.00  from holding Citigroup or generate 0.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	95.24%
Values	Daily Returns

Citigroup  vs.  Trinity Watthana Public

Citigroup

Risk-Adjusted Performance

12 of 100

OK

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 uncertain fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

Trinity Watthana Public

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Trinity Watthana Public are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, Trinity Watthana sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and Trinity Watthana

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

The idea behind Citigroup and Trinity Watthana 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.

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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.