Correlation Between Citigroup and Amcor Plc
Can any of the company-specific risk be diversified away by investing in both Citigroup and Amcor Plc 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 Amcor Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Amcor plc, you can compare the effects of market volatilities on Citigroup and Amcor Plc 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 Amcor Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Amcor Plc.
Diversification Opportunities for Citigroup and Amcor Plc
Significant diversification
The 3 months correlation between Citigroup and Amcor is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Amcor plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amcor plc 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 Amcor Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amcor plc has no effect on the direction of Citigroup i.e., Citigroup and Amcor Plc go up and down completely randomly.
Pair Corralation between Citigroup and Amcor Plc
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.94 times more return on investment than Amcor Plc. However, Citigroup is 1.06 times less risky than Amcor Plc. It trades about 0.2 of its potential returns per unit of risk. Amcor plc is currently generating about 0.03 per unit of risk. If you would invest 5,716 in Citigroup on September 13, 2024 and sell it today you would earn a total of 1,480 from holding Citigroup or generate 25.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Citigroup vs. Amcor plc
Performance |
| Timeline |
| Citigroup |
| Amcor plc |
Citigroup and Amcor Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Amcor Plc
The main advantage of trading using opposite Citigroup and Amcor Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Amcor Plc 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 Amcor Plc will offset losses from the drop in Amcor Plc's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Amcor Plc vs. THAI BEVERAGE | Amcor Plc vs. SCANSOURCE | Amcor Plc vs. DATANG INTL POW | Amcor Plc vs. National Storage Affiliates |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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