Correlation Between Citigroup and AFC Gamma
Can any of the company-specific risk be diversified away by investing in both Citigroup and AFC Gamma 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 AFC Gamma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and AFC Gamma, you can compare the effects of market volatilities on Citigroup and AFC Gamma 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 AFC Gamma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and AFC Gamma.
Diversification Opportunities for Citigroup and AFC Gamma
Excellent diversification
The 3 months correlation between Citigroup and AFC is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and AFC Gamma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AFC Gamma 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 AFC Gamma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AFC Gamma has no effect on the direction of Citigroup i.e., Citigroup and AFC Gamma go up and down completely randomly.
Pair Corralation between Citigroup and AFC Gamma
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.84 times more return on investment than AFC Gamma. However, Citigroup is 1.19 times less risky than AFC Gamma. It trades about 0.07 of its potential returns per unit of risk. AFC Gamma is currently generating about 0.03 per unit of risk. If you would invest 4,117 in Citigroup on August 28, 2024 and sell it today you would earn a total of 2,958 from holding Citigroup or generate 71.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. AFC Gamma
Performance |
| Timeline |
| Citigroup |
| AFC Gamma |
Citigroup and AFC Gamma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and AFC Gamma
The main advantage of trading using opposite Citigroup and AFC Gamma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, AFC Gamma 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 AFC Gamma will offset losses from the drop in AFC Gamma's long position.| Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
| AFC Gamma vs. Newlake Capital Partners | AFC Gamma vs. SBA Communications Corp | AFC Gamma vs. Gladstone Land | AFC Gamma vs. Lamar Advertising |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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