Correlation Between Citigroup and TGS Esports

Can any of the company-specific risk be diversified away by investing in both Citigroup and TGS Esports 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 TGS Esports into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Citigroup and TGS Esports, you can compare the effects of market volatilities on Citigroup and TGS Esports 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 TGS Esports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and TGS Esports.

Diversification Opportunities for Citigroup and TGS Esports

0.0

Correlation Coefficient

Citigroup  TGS Esports

Pay attention - limited upside

The 3 months correlation between Citigroup and TGS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and TGS Esports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TGS Esports 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 TGS Esports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TGS Esports has no effect on the direction of Citigroup i.e., Citigroup and TGS Esports go up and down completely randomly.

Pair Corralation between Citigroup and TGS Esports

If you would invest  4,399  in Citigroup on June 20, 2024 and sell it today you would earn a total of  1,591  from holding Citigroup or generate 36.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Citigroup  vs.  TGS Esports

Citigroup

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Citigroup has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Citigroup is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

TGS Esports

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TGS Esports has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, TGS Esports is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Citigroup and TGS Esports

The main advantage of trading using opposite Citigroup and TGS Esports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, TGS Esports 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 TGS Esports will offset losses from the drop in TGS Esports' long position.

The idea behind Citigroup and TGS Esports 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.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.