Correlation Between Citigroup and Alton Sports
Can any of the company-specific risk be diversified away by investing in both Citigroup and Alton Sports 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 Alton Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Alton Sports CoLtd, you can compare the effects of market volatilities on Citigroup and Alton Sports 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 Alton Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Alton Sports.
Diversification Opportunities for Citigroup and Alton Sports
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and Alton is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Alton Sports CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alton Sports CoLtd 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 Alton Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alton Sports CoLtd has no effect on the direction of Citigroup i.e., Citigroup and Alton Sports go up and down completely randomly.
Pair Corralation between Citigroup and Alton Sports
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.65 times more return on investment than Alton Sports. However, Citigroup is 1.65 times more volatile than Alton Sports CoLtd. It trades about 0.26 of its potential returns per unit of risk. Alton Sports CoLtd is currently generating about -0.26 per unit of risk. If you would invest 6,361 in Citigroup on September 1, 2024 and sell it today you would earn a total of 726.00 from holding Citigroup or generate 11.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Citigroup vs. Alton Sports CoLtd
Performance |
| Timeline |
| Citigroup |
| Alton Sports CoLtd |
Citigroup and Alton Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Alton Sports
The main advantage of trading using opposite Citigroup and Alton Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Alton Sports 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 Alton Sports will offset losses from the drop in Alton Sports' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Alton Sports vs. LG Display | Alton Sports vs. Hyundai Motor | Alton Sports vs. Hyundai Motor Co | Alton Sports vs. Hyundai Motor Co |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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