Correlation Between Citigroup and Anglo Eastern
Can any of the company-specific risk be diversified away by investing in both Citigroup and Anglo Eastern 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 Anglo Eastern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Anglo Eastern Plantations PLC, you can compare the effects of market volatilities on Citigroup and Anglo Eastern 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 Anglo Eastern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Anglo Eastern.
Diversification Opportunities for Citigroup and Anglo Eastern
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Anglo is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Anglo Eastern Plantations PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anglo Eastern Planta 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 Anglo Eastern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anglo Eastern Planta has no effect on the direction of Citigroup i.e., Citigroup and Anglo Eastern go up and down completely randomly.
Pair Corralation between Citigroup and Anglo Eastern
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.13 times more return on investment than Anglo Eastern. However, Citigroup is 1.13 times more volatile than Anglo Eastern Plantations PLC. It trades about 0.08 of its potential returns per unit of risk. Anglo Eastern Plantations PLC is currently generating about -0.02 per unit of risk. If you would invest 4,558 in Citigroup on September 2, 2024 and sell it today you would earn a total of 2,529 from holding Citigroup or generate 55.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.67% |
| Values | Daily Returns |
Citigroup vs. Anglo Eastern Plantations PLC
Performance |
| Timeline |
| Citigroup |
| Anglo Eastern Planta |
Citigroup and Anglo Eastern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Anglo Eastern
The main advantage of trading using opposite Citigroup and Anglo Eastern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Anglo Eastern 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 Anglo Eastern will offset losses from the drop in Anglo Eastern's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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