Correlation Between Citigroup and Qtec First

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

Diversification Opportunities for Citigroup and Qtec First

0.77
  Correlation Coefficient

Poor diversification

The 3 months correlation between Citigroup and Qtec First is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Qtec First Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qtec First Trust 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 Qtec First. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qtec First Trust has no effect on the direction of Citigroup i.e., Citigroup and Qtec First go up and down completely randomly.

Pair Corralation between Citigroup and Qtec First

Taking into account the 90-day investment horizon Citigroup is expected to under-perform the Qtec First. In addition to that, Citigroup is 1.29 times more volatile than Qtec First Trust. It trades about -0.42 of its total potential returns per unit of risk. Qtec First Trust is currently generating about -0.07 per unit of volatility. If you would invest  5,139  in Qtec First Trust on July 5, 2022 and sell it today you would lose (102.00)  from holding Qtec First Trust or give up 1.98% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Citigroup  vs.  Qtec First Trust

 Performance (%) 
       Timeline  
Citigroup 
Citigroup Performance
0 of 100
Over the last 90 days Citigroup has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Citigroup Price Channel

Qtec First Trust 
Qtec First Performance
0 of 100
Over the last 90 days Qtec First Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Qtec First is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Qtec First Price Channel

Citigroup and Qtec First Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Citigroup and Qtec First

The main advantage of trading using opposite Citigroup and Qtec First positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Qtec First 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 Qtec First will offset losses from the drop in Qtec First's long position.
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The idea behind Citigroup and Qtec First Trust 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.

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