Correlation Between Citigroup and Formosa Taffeta
Can any of the company-specific risk be diversified away by investing in both Citigroup and Formosa Taffeta 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 Formosa Taffeta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Formosa Taffeta Co, you can compare the effects of market volatilities on Citigroup and Formosa Taffeta 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 Formosa Taffeta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Formosa Taffeta.
Diversification Opportunities for Citigroup and Formosa Taffeta
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Citigroup and Formosa is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Formosa Taffeta Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Formosa Taffeta 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 Formosa Taffeta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Formosa Taffeta has no effect on the direction of Citigroup i.e., Citigroup and Formosa Taffeta go up and down completely randomly.
Pair Corralation between Citigroup and Formosa Taffeta
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.48 times more return on investment than Formosa Taffeta. However, Citigroup is 1.48 times more volatile than Formosa Taffeta Co. It trades about 0.22 of its potential returns per unit of risk. Formosa Taffeta Co is currently generating about 0.07 per unit of risk. If you would invest 6,360 in Citigroup on August 29, 2024 and sell it today you would earn a total of 656.00 from holding Citigroup or generate 10.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Formosa Taffeta Co
Performance |
| Timeline |
| Citigroup |
| Formosa Taffeta |
Citigroup and Formosa Taffeta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Formosa Taffeta
The main advantage of trading using opposite Citigroup and Formosa Taffeta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Formosa Taffeta 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 Formosa Taffeta will offset losses from the drop in Formosa Taffeta's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Formosa Taffeta vs. Yulon Finance Corp | Formosa Taffeta vs. Taiwan Secom Co | Formosa Taffeta vs. Great Wall Enterprise |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| CEOs Directory Screen CEOs from public companies around the world |