Correlation Between Citigroup and TAL Education
Can any of the company-specific risk be diversified away by investing in both Citigroup and TAL Education 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 TAL Education into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and TAL Education Group, you can compare the effects of market volatilities on Citigroup and TAL Education 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 TAL Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and TAL Education.
Diversification Opportunities for Citigroup and TAL Education
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and TAL is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and TAL Education Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TAL Education Group 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 TAL Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TAL Education Group has no effect on the direction of Citigroup i.e., Citigroup and TAL Education go up and down completely randomly.
Pair Corralation between Citigroup and TAL Education
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.55 times more return on investment than TAL Education. However, Citigroup is 1.81 times less risky than TAL Education. It trades about 0.01 of its potential returns per unit of risk. TAL Education Group is currently generating about -0.22 per unit of risk. If you would invest 7,143 in Citigroup on October 13, 2024 and sell it today you would lose (3.00) from holding Citigroup or give up 0.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 85.0% |
| Values | Daily Returns |
Citigroup vs. TAL Education Group
Performance |
| Timeline |
| Citigroup |
| TAL Education Group |
Citigroup and TAL Education Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and TAL Education
The main advantage of trading using opposite Citigroup and TAL Education positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, TAL Education 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 TAL Education will offset losses from the drop in TAL Education's long position.| Citigroup vs. Nu Holdings | Citigroup vs. Canadian Imperial Bank | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
| TAL Education vs. AOYAMA TRADING | TAL Education vs. MidCap Financial Investment | TAL Education vs. Guangdong Investment Limited | TAL Education vs. Advanced Medical Solutions |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |