Correlation Between Citigroup and Transphorm Technology
Can any of the company-specific risk be diversified away by investing in both Citigroup and Transphorm Technology 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 Transphorm Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Transphorm Technology, you can compare the effects of market volatilities on Citigroup and Transphorm Technology 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 Transphorm Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Transphorm Technology.
Diversification Opportunities for Citigroup and Transphorm Technology
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Transphorm is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Transphorm Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transphorm Technology 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 Transphorm Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transphorm Technology has no effect on the direction of Citigroup i.e., Citigroup and Transphorm Technology go up and down completely randomly.
Pair Corralation between Citigroup and Transphorm Technology
Taking into account the 90-day investment horizon Citigroup is expected to generate 6.3 times less return on investment than Transphorm Technology. But when comparing it to its historical volatility, Citigroup is 1.53 times less risky than Transphorm Technology. It trades about 0.1 of its potential returns per unit of risk. Transphorm Technology is currently generating about 0.42 of returns per unit of risk over similar time horizon. If you would invest 475.00 in Transphorm Technology on September 12, 2024 and sell it today you would earn a total of 35.00 from holding Transphorm Technology or generate 7.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.84% |
| Values | Daily Returns |
Citigroup vs. Transphorm Technology
Performance |
| Timeline |
| Citigroup |
| Transphorm Technology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Citigroup and Transphorm Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Transphorm Technology
The main advantage of trading using opposite Citigroup and Transphorm Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Transphorm Technology 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 Transphorm Technology will offset losses from the drop in Transphorm Technology's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Transphorm Technology vs. Sumco Corp ADR | Transphorm Technology vs. Lasertec | Transphorm Technology vs. Asm Pacific Technology | Transphorm Technology vs. Disco Corp ADR |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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