Correlation Between Citigroup and AHLERS
Can any of the company-specific risk be diversified away by investing in both Citigroup and AHLERS 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 AHLERS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and AHLERS, you can compare the effects of market volatilities on Citigroup and AHLERS 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 AHLERS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and AHLERS.
Diversification Opportunities for Citigroup and AHLERS
Poor diversification
The 3 months correlation between Citigroup and AHLERS is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and AHLERS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AHLERS 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 AHLERS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AHLERS has no effect on the direction of Citigroup i.e., Citigroup and AHLERS go up and down completely randomly.
Pair Corralation between Citigroup and AHLERS
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.43 times more return on investment than AHLERS. However, Citigroup is 2.33 times less risky than AHLERS. It trades about 0.18 of its potential returns per unit of risk. AHLERS is currently generating about -0.02 per unit of risk. If you would invest 5,937 in Citigroup on October 18, 2024 and sell it today you would earn a total of 1,890 from holding Citigroup or generate 31.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.78% |
| Values | Daily Returns |
Citigroup vs. AHLERS
Performance |
| Timeline |
| Citigroup |
| AHLERS |
Citigroup and AHLERS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and AHLERS
The main advantage of trading using opposite Citigroup and AHLERS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, AHLERS 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 AHLERS will offset losses from the drop in AHLERS's long position.| Citigroup vs. Nu Holdings | Citigroup vs. Canadian Imperial Bank | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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