Correlation Between Citigroup and Aeries Technology
Can any of the company-specific risk be diversified away by investing in both Citigroup and Aeries Technology 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 Aeries Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Aeries Technology, you can compare the effects of market volatilities on Citigroup and Aeries Technology 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 Aeries Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Aeries Technology.
Diversification Opportunities for Citigroup and Aeries Technology
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Aeries is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Aeries Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeries Technology 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 Aeries Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeries Technology has no effect on the direction of Citigroup i.e., Citigroup and Aeries Technology go up and down completely randomly.
Pair Corralation between Citigroup and Aeries Technology
Taking into account the 90-day investment horizon Citigroup is expected to generate 5.78 times less return on investment than Aeries Technology. But when comparing it to its historical volatility, Citigroup is 13.15 times less risky than Aeries Technology. It trades about 0.07 of its potential returns per unit of risk. Aeries Technology is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 13.00 in Aeries Technology on August 29, 2024 and sell it today you would lose (9.49) from holding Aeries Technology or give up 73.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 21.17% |
| Values | Daily Returns |
Citigroup vs. Aeries Technology
Performance |
| Timeline |
| Citigroup |
| Aeries Technology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Citigroup and Aeries Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Aeries Technology
The main advantage of trading using opposite Citigroup and Aeries Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Aeries Technology 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 Aeries Technology will offset losses from the drop in Aeries Technology's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Aeries Technology vs. Ecolab Inc | Aeries Technology vs. Air Products and | Aeries Technology vs. Ecovyst | Aeries Technology vs. Axalta Coating Systems |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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