Correlation Between Tandem Diabetes and CITIGROUP

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

By analyzing existing cross correlation between Tandem Diabetes Care and CITIGROUP FDG INC, you can compare the effects of market volatilities on Tandem Diabetes and CITIGROUP 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 Tandem Diabetes with a short position of CITIGROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tandem Diabetes and CITIGROUP.

Diversification Opportunities for Tandem Diabetes and CITIGROUP

-0.64

Correlation Coefficient

Tandem Diabetes  CITIGROUP

Excellent diversification

The 3 months correlation between Tandem and CITIGROUP is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Tandem Diabetes Care and CITIGROUP FDG INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIGROUP FDG INC and Tandem Diabetes 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 Tandem Diabetes Care are associated (or correlated) with CITIGROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITIGROUP FDG INC has no effect on the direction of Tandem Diabetes i.e., Tandem Diabetes and CITIGROUP go up and down completely randomly.

Pair Corralation between Tandem Diabetes and CITIGROUP

Given the investment horizon of 90 days Tandem Diabetes Care is expected to generate 4.61 times more return on investment than CITIGROUP. However, Tandem Diabetes is 4.61 times more volatile than CITIGROUP FDG INC. It trades about 0.1 of its potential returns per unit of risk. CITIGROUP FDG INC is currently generating about -0.29 per unit of risk. If you would invest  3,275  in Tandem Diabetes Care on September 26, 2024 and sell it today you would earn a total of  425.00  from holding Tandem Diabetes Care or generate 12.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	24.39%
Values	Daily Returns

Tandem Diabetes Care  vs.  CITIGROUP FDG INC

Tandem Diabetes Care

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tandem Diabetes Care has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

CITIGROUP FDG INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CITIGROUP FDG INC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Bond's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for CITIGROUP FDG INC private investors.

Pair Trading with Tandem Diabetes and CITIGROUP

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

The idea behind Tandem Diabetes Care and CITIGROUP FDG INC 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.