Correlation Between Citigroup and Thai OPP
Can any of the company-specific risk be diversified away by investing in both Citigroup and Thai OPP 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 Thai OPP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Thai OPP Public, you can compare the effects of market volatilities on Citigroup and Thai OPP 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 Thai OPP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Thai OPP.
Diversification Opportunities for Citigroup and Thai OPP
Average diversification
The 3 months correlation between Citigroup and Thai is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Thai OPP Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai OPP Public 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 Thai OPP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai OPP Public has no effect on the direction of Citigroup i.e., Citigroup and Thai OPP go up and down completely randomly.
Pair Corralation between Citigroup and Thai OPP
Taking into account the 90-day investment horizon Citigroup is expected to generate 5.83 times more return on investment than Thai OPP. However, Citigroup is 5.83 times more volatile than Thai OPP Public. It trades about 0.23 of its potential returns per unit of risk. Thai OPP Public is currently generating about -0.21 per unit of risk. If you would invest 6,255 in Citigroup on August 24, 2024 and sell it today you would earn a total of 729.00 from holding Citigroup or generate 11.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Citigroup vs. Thai OPP Public
Performance |
| Timeline |
| Citigroup |
| Thai OPP Public |
Citigroup and Thai OPP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Thai OPP
The main advantage of trading using opposite Citigroup and Thai OPP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Thai OPP 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 Thai OPP will offset losses from the drop in Thai OPP's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Thai OPP vs. Asia Sermkij Leasing | Thai OPP vs. Halcyon Technology Public | Thai OPP vs. Sun Vending Technology | Thai OPP vs. Peerapat Technology Public |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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