Correlation Between Citigroup and TOWA
Can any of the company-specific risk be diversified away by investing in both Citigroup and TOWA 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 TOWA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and TOWA Corporation, you can compare the effects of market volatilities on Citigroup and TOWA 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 TOWA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and TOWA.
Diversification Opportunities for Citigroup and TOWA
Pay attention - limited upside
The 3 months correlation between Citigroup and TOWA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and TOWA Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TOWA 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 TOWA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TOWA has no effect on the direction of Citigroup i.e., Citigroup and TOWA go up and down completely randomly.
Pair Corralation between Citigroup and TOWA
If you would invest 4,532 in Citigroup on January 12, 2025 and sell it today you would earn a total of 1,627 from holding Citigroup or generate 35.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Citigroup vs. TOWA Corp.
Performance |
| Timeline |
| Citigroup |
| TOWA |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Citigroup and TOWA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and TOWA
The main advantage of trading using opposite Citigroup and TOWA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, TOWA 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 TOWA will offset losses from the drop in TOWA's long position.| Citigroup vs. Barclays PLC ADR | Citigroup vs. ING Group NV | Citigroup vs. Banco Santander SA | Citigroup vs. HSBC Holdings PLC |
| TOWA vs. Host Hotels Resorts | TOWA vs. Q2M Managementberatung AG | TOWA vs. EMPEROR ENT HOTEL | TOWA vs. Value Management Research |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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