Correlation Between Citigroup and American Century
Can any of the company-specific risk be diversified away by investing in both Citigroup and American Century 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 American Century into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and American Century Global, you can compare the effects of market volatilities on Citigroup and American Century 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 American Century. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and American Century.
Diversification Opportunities for Citigroup and American Century
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Citigroup and American is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and American Century Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Century Global 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 American Century. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Century Global has no effect on the direction of Citigroup i.e., Citigroup and American Century go up and down completely randomly.
Pair Corralation between Citigroup and American Century
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.71 times more return on investment than American Century. However, Citigroup is 1.71 times more volatile than American Century Global. It trades about 0.06 of its potential returns per unit of risk. American Century Global is currently generating about 0.05 per unit of risk. If you would invest 4,651 in Citigroup on September 1, 2024 and sell it today you would earn a total of 2,436 from holding Citigroup or generate 52.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.78% |
| Values | Daily Returns |
Citigroup vs. American Century Global
Performance |
| Timeline |
| Citigroup |
| American Century Global |
Citigroup and American Century Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and American Century
The main advantage of trading using opposite Citigroup and American Century positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, American Century 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 American Century will offset losses from the drop in American Century's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| American Century vs. Transamerica Financial Life | American Century vs. Prudential Jennison Financial | American Century vs. Fidelity Advisor Financial | American Century vs. Blackrock Financial Institutions |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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