Correlation Between Citigroup and Therma Bright
Can any of the company-specific risk be diversified away by investing in both Citigroup and Therma Bright 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 Therma Bright into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Therma Bright, you can compare the effects of market volatilities on Citigroup and Therma Bright 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 Therma Bright. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Therma Bright.
Diversification Opportunities for Citigroup and Therma Bright
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and Therma is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Therma Bright in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Therma Bright 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 Therma Bright. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Therma Bright has no effect on the direction of Citigroup i.e., Citigroup and Therma Bright go up and down completely randomly.
Pair Corralation between Citigroup and Therma Bright
Taking into account the 90-day investment horizon Citigroup is expected to generate 6.47 times less return on investment than Therma Bright. But when comparing it to its historical volatility, Citigroup is 10.46 times less risky than Therma Bright. It trades about 0.08 of its potential returns per unit of risk. Therma Bright is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 5.50 in Therma Bright on September 1, 2024 and sell it today you would lose (2.75) from holding Therma Bright or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Therma Bright
Performance |
| Timeline |
| Citigroup |
| Therma Bright |
Citigroup and Therma Bright Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Therma Bright
The main advantage of trading using opposite Citigroup and Therma Bright positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Therma Bright 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 Therma Bright will offset losses from the drop in Therma Bright's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Therma Bright vs. Solar Alliance Energy | Therma Bright vs. Braille Energy Systems | Therma Bright vs. MedMira | Therma Bright vs. Lite Access Technologies |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |