Correlation Between Citigroup and TTK Healthcare

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Can any of the company-specific risk be diversified away by investing in both Citigroup and TTK Healthcare 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 TTK Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and TTK Healthcare Limited, you can compare the effects of market volatilities on Citigroup and TTK Healthcare 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 TTK Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and TTK Healthcare.

Diversification Opportunities for Citigroup and TTK Healthcare

-0.84
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Citigroup and TTK is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and TTK Healthcare Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TTK Healthcare 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 TTK Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TTK Healthcare has no effect on the direction of Citigroup i.e., Citigroup and TTK Healthcare go up and down completely randomly.

Pair Corralation between Citigroup and TTK Healthcare

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.85 times more return on investment than TTK Healthcare. However, Citigroup is 1.18 times less risky than TTK Healthcare. It trades about 0.08 of its potential returns per unit of risk. TTK Healthcare Limited is currently generating about 0.04 per unit of risk. If you would invest  4,492  in Citigroup on November 28, 2024 and sell it today you would earn a total of  3,322  from holding Citigroup or generate 73.95% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy98.17%
ValuesDaily Returns

Citigroup  vs.  TTK Healthcare Limited

 Performance 
       Timeline  
Citigroup 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Citigroup may actually be approaching a critical reversion point that can send shares even higher in March 2025.
TTK Healthcare 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days TTK Healthcare Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in March 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Citigroup and TTK Healthcare Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Citigroup and TTK Healthcare

The main advantage of trading using opposite Citigroup and TTK Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, TTK Healthcare 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 TTK Healthcare will offset losses from the drop in TTK Healthcare's long position.
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The idea behind Citigroup and TTK Healthcare Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.

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