Correlation Between Citigroup and Akre Focus
Can any of the company-specific risk be diversified away by investing in both Citigroup and Akre Focus 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 Akre Focus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Akre Focus Fund, you can compare the effects of market volatilities on Citigroup and Akre Focus 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 Akre Focus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Akre Focus.
Diversification Opportunities for Citigroup and Akre Focus
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and AKRE is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Akre Focus Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akre Focus Fund 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 Akre Focus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akre Focus Fund has no effect on the direction of Citigroup i.e., Citigroup and Akre Focus go up and down completely randomly.
Pair Corralation between Citigroup and Akre Focus
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.58 times more return on investment than Akre Focus. However, Citigroup is 2.58 times more volatile than Akre Focus Fund. It trades about 0.21 of its potential returns per unit of risk. Akre Focus Fund is currently generating about 0.29 per unit of risk. If you would invest 6,360 in Citigroup on August 29, 2024 and sell it today you would earn a total of 615.00 from holding Citigroup or generate 9.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Akre Focus Fund
Performance |
| Timeline |
| Citigroup |
| Akre Focus Fund |
Citigroup and Akre Focus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Akre Focus
The main advantage of trading using opposite Citigroup and Akre Focus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Akre Focus 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 Akre Focus will offset losses from the drop in Akre Focus' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |