Correlation Between Citigroup and Alternative Energy
Can any of the company-specific risk be diversified away by investing in both Citigroup and Alternative Energy 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 Alternative Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Alternative Energy, you can compare the effects of market volatilities on Citigroup and Alternative Energy 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 Alternative Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Alternative Energy.
Diversification Opportunities for Citigroup and Alternative Energy
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Alternative is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Alternative Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alternative Energy 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 Alternative Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alternative Energy has no effect on the direction of Citigroup i.e., Citigroup and Alternative Energy go up and down completely randomly.
Pair Corralation between Citigroup and Alternative Energy
If you would invest 6,255 in Citigroup on August 24, 2024 and sell it today you would earn a total of 640.00 from holding Citigroup or generate 10.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Alternative Energy
Performance |
| Timeline |
| Citigroup |
| Alternative Energy |
Citigroup and Alternative Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Alternative Energy
The main advantage of trading using opposite Citigroup and Alternative Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Alternative Energy 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 Alternative Energy will offset losses from the drop in Alternative Energy's long position.| Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Royal Bank of | Citigroup vs. JPMorgan Chase Co |
| Alternative Energy vs. Alibaba Health Information | Alternative Energy vs. Allstar Health Brands | Alternative Energy vs. Walgreens Boots Alliance | Alternative Energy vs. Alibaba Health Information |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |