Correlation Between Citigroup and Torrent Capital
Can any of the company-specific risk be diversified away by investing in both Citigroup and Torrent Capital 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 Torrent Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Torrent Capital, you can compare the effects of market volatilities on Citigroup and Torrent Capital 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 Torrent Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Torrent Capital.
Diversification Opportunities for Citigroup and Torrent Capital
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and Torrent is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Torrent Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Torrent Capital 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 Torrent Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Torrent Capital has no effect on the direction of Citigroup i.e., Citigroup and Torrent Capital go up and down completely randomly.
Pair Corralation between Citigroup and Torrent Capital
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.49 times more return on investment than Torrent Capital. However, Citigroup is 2.05 times less risky than Torrent Capital. It trades about 0.12 of its potential returns per unit of risk. Torrent Capital is currently generating about -0.03 per unit of risk. If you would invest 4,411 in Citigroup on August 25, 2024 and sell it today you would earn a total of 2,573 from holding Citigroup or generate 58.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Torrent Capital
Performance |
| Timeline |
| Citigroup |
| Torrent Capital |
Citigroup and Torrent Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Torrent Capital
The main advantage of trading using opposite Citigroup and Torrent Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Torrent Capital 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 Torrent Capital will offset losses from the drop in Torrent Capital's long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
| Torrent Capital vs. Blackstone Group | Torrent Capital vs. BlackRock | Torrent Capital vs. Apollo Global Management | Torrent Capital vs. Investor AB ser |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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