Correlation Between Citigroup and Aberdeen Short
Can any of the company-specific risk be diversified away by investing in both Citigroup and Aberdeen Short 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 Aberdeen Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Aberdeen Short Duration, you can compare the effects of market volatilities on Citigroup and Aberdeen Short 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 Aberdeen Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Aberdeen Short.
Diversification Opportunities for Citigroup and Aberdeen Short
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citigroup and Aberdeen is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Aberdeen Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Short Duration 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 Aberdeen Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Short Duration has no effect on the direction of Citigroup i.e., Citigroup and Aberdeen Short go up and down completely randomly.
Pair Corralation between Citigroup and Aberdeen Short
Taking into account the 90-day investment horizon Citigroup is expected to generate 11.97 times more return on investment than Aberdeen Short. However, Citigroup is 11.97 times more volatile than Aberdeen Short Duration. It trades about 0.07 of its potential returns per unit of risk. Aberdeen Short Duration is currently generating about 0.18 per unit of risk. If you would invest 6,079 in Citigroup on September 1, 2024 and sell it today you would earn a total of 1,008 from holding Citigroup or generate 16.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Citigroup vs. Aberdeen Short Duration
Performance |
| Timeline |
| Citigroup |
| Aberdeen Short Duration |
Citigroup and Aberdeen Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Aberdeen Short
The main advantage of trading using opposite Citigroup and Aberdeen Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Aberdeen Short 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 Aberdeen Short will offset losses from the drop in Aberdeen Short's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Aberdeen Short vs. Us Government Securities | Aberdeen Short vs. Goldman Sachs Government | Aberdeen Short vs. Virtus Seix Government | Aberdeen Short vs. Franklin Government Money |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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