Correlation Between Align Technology and Citigroup
Can any of the company-specific risk be diversified away by investing in both Align Technology and Citigroup 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 Align Technology and Citigroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Align Technology and Citigroup, you can compare the effects of market volatilities on Align Technology and Citigroup 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 Align Technology with a short position of Citigroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Align Technology and Citigroup.
Diversification Opportunities for Align Technology and Citigroup
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Align and Citigroup is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Align Technology and Citigroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citigroup and Align Technology 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 Align Technology are associated (or correlated) with Citigroup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citigroup has no effect on the direction of Align Technology i.e., Align Technology and Citigroup go up and down completely randomly.
Pair Corralation between Align Technology and Citigroup
Assuming the 90 days trading horizon Align Technology is expected to generate 1.56 times less return on investment than Citigroup. In addition to that, Align Technology is 1.73 times more volatile than Citigroup. It trades about 0.04 of its total potential returns per unit of risk. Citigroup is currently generating about 0.1 per unit of volatility. If you would invest 3,480 in Citigroup on September 12, 2024 and sell it today you would earn a total of 3,842 from holding Citigroup or generate 110.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.0% |
| Values | Daily Returns |
Align Technology vs. Citigroup
Performance |
| Timeline |
| Align Technology |
| Citigroup |
Align Technology and Citigroup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Align Technology and Citigroup
The main advantage of trading using opposite Align Technology and Citigroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Align Technology position performs unexpectedly, Citigroup 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 Citigroup will offset losses from the drop in Citigroup's long position.| Align Technology vs. Fundo Investimento Imobiliario | Align Technology vs. LESTE FDO INV | Align Technology vs. Fras le SA | Align Technology vs. Western Digital |
| Citigroup vs. Align Technology | Citigroup vs. Apartment Investment and | Citigroup vs. Global X Funds | Citigroup vs. Marvell Technology |
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.
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