Correlation Between Citigroup and AiMedia Technologies
Can any of the company-specific risk be diversified away by investing in both Citigroup and AiMedia Technologies 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 AiMedia Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and AiMedia Technologies, you can compare the effects of market volatilities on Citigroup and AiMedia Technologies 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 AiMedia Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and AiMedia Technologies.
Diversification Opportunities for Citigroup and AiMedia Technologies
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and AiMedia is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and AiMedia Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AiMedia Technologies 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 AiMedia Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AiMedia Technologies has no effect on the direction of Citigroup i.e., Citigroup and AiMedia Technologies go up and down completely randomly.
Pair Corralation between Citigroup and AiMedia Technologies
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.73 times less return on investment than AiMedia Technologies. But when comparing it to its historical volatility, Citigroup is 2.49 times less risky than AiMedia Technologies. It trades about 0.18 of its potential returns per unit of risk. AiMedia Technologies is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 41.00 in AiMedia Technologies on November 3, 2024 and sell it today you would earn a total of 32.00 from holding AiMedia Technologies or generate 78.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Citigroup vs. AiMedia Technologies
Performance |
| Timeline |
| Citigroup |
| AiMedia Technologies |
Citigroup and AiMedia Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and AiMedia Technologies
The main advantage of trading using opposite Citigroup and AiMedia Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, AiMedia Technologies 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 AiMedia Technologies will offset losses from the drop in AiMedia Technologies' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| AiMedia Technologies vs. Air New Zealand | AiMedia Technologies vs. Lykos Metals | AiMedia Technologies vs. Truscott Mining Corp | AiMedia Technologies vs. Aeon Metals |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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