Correlation Between Citigroup and ABVC Biopharma

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

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

Diversification Opportunities for Citigroup and ABVC Biopharma

0.89

Correlation Coefficient

Citigroup  ABVC Biopharma

Very poor diversification

The 3 months correlation between Citigroup and ABVC is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and ABVC Biopharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABVC Biopharma 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 ABVC Biopharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABVC Biopharma has no effect on the direction of Citigroup i.e., Citigroup and ABVC Biopharma go up and down completely randomly.

Pair Corralation between Citigroup and ABVC Biopharma

Taking into account the 90-day investment horizon Citigroup is expected to generate 4.83 times less return on investment than ABVC Biopharma. But when comparing it to its historical volatility, Citigroup is 7.11 times less risky than ABVC Biopharma. It trades about 0.39 of its potential returns per unit of risk. ABVC Biopharma is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  88.00  in ABVC Biopharma on April 23, 2025 and sell it today you would earn a total of  264.00  from holding ABVC Biopharma or generate 300.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Citigroup  vs.  ABVC Biopharma

Citigroup

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 31 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

ABVC Biopharma

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ABVC Biopharma are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, ABVC Biopharma exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and ABVC Biopharma

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

The idea behind Citigroup and ABVC Biopharma 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.