Correlation Between Citigroup and Afrimat
Can any of the company-specific risk be diversified away by investing in both Citigroup and Afrimat 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 Afrimat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Afrimat, you can compare the effects of market volatilities on Citigroup and Afrimat 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 Afrimat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Afrimat.
Diversification Opportunities for Citigroup and Afrimat
Very good diversification
The 3 months correlation between Citigroup and Afrimat is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Afrimat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Afrimat 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 Afrimat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Afrimat has no effect on the direction of Citigroup i.e., Citigroup and Afrimat go up and down completely randomly.
Pair Corralation between Citigroup and Afrimat
Taking into account the 90-day investment horizon Citigroup is expected to generate 3.64 times less return on investment than Afrimat. But when comparing it to its historical volatility, Citigroup is 7.1 times less risky than Afrimat. It trades about 0.07 of its potential returns per unit of risk. Afrimat is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 509,208 in Afrimat on September 3, 2024 and sell it today you would earn a total of 142,092 from holding Afrimat or generate 27.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.19% |
| Values | Daily Returns |
Citigroup vs. Afrimat
Performance |
| Timeline |
| Citigroup |
| Afrimat |
Citigroup and Afrimat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Afrimat
The main advantage of trading using opposite Citigroup and Afrimat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Afrimat 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 Afrimat will offset losses from the drop in Afrimat's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Afrimat vs. Deneb Investments | Afrimat vs. Frontier Transport Holdings | Afrimat vs. RCL Foods | Afrimat vs. Astral Foods |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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