Correlation Between Citigroup and MiTAC Holdings
Can any of the company-specific risk be diversified away by investing in both Citigroup and MiTAC Holdings 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 MiTAC Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and MiTAC Holdings Corp, you can compare the effects of market volatilities on Citigroup and MiTAC Holdings 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 MiTAC Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and MiTAC Holdings.
Diversification Opportunities for Citigroup and MiTAC Holdings
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and MiTAC is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and MiTAC Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MiTAC Holdings Corp 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 MiTAC Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MiTAC Holdings Corp has no effect on the direction of Citigroup i.e., Citigroup and MiTAC Holdings go up and down completely randomly.
Pair Corralation between Citigroup and MiTAC Holdings
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.72 times less return on investment than MiTAC Holdings. But when comparing it to its historical volatility, Citigroup is 1.64 times less risky than MiTAC Holdings. It trades about 0.12 of its potential returns per unit of risk. MiTAC Holdings Corp is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 4,020 in MiTAC Holdings Corp on August 26, 2024 and sell it today you would earn a total of 4,280 from holding MiTAC Holdings Corp or generate 106.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.59% |
| Values | Daily Returns |
Citigroup vs. MiTAC Holdings Corp
Performance |
| Timeline |
| Citigroup |
| MiTAC Holdings Corp |
Citigroup and MiTAC Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and MiTAC Holdings
The main advantage of trading using opposite Citigroup and MiTAC Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, MiTAC Holdings 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 MiTAC Holdings will offset losses from the drop in MiTAC Holdings' long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
| MiTAC Holdings vs. Novatek Microelectronics Corp | MiTAC Holdings vs. Quanta Computer | MiTAC Holdings vs. United Microelectronics |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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