Correlation Between Citigroup and Atari SA
Can any of the company-specific risk be diversified away by investing in both Citigroup and Atari SA 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 Atari SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Atari SA, you can compare the effects of market volatilities on Citigroup and Atari SA 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 Atari SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Atari SA.
Diversification Opportunities for Citigroup and Atari SA
Very weak diversification
The 3 months correlation between Citigroup and Atari is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Atari SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atari SA 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 Atari SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atari SA has no effect on the direction of Citigroup i.e., Citigroup and Atari SA go up and down completely randomly.
Pair Corralation between Citigroup and Atari SA
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.49 times more return on investment than Atari SA. However, Citigroup is 2.03 times less risky than Atari SA. It trades about 0.07 of its potential returns per unit of risk. Atari SA is currently generating about -0.01 per unit of risk. If you would invest 4,293 in Citigroup on September 3, 2024 and sell it today you would earn a total of 2,794 from holding Citigroup or generate 65.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.02% |
| Values | Daily Returns |
Citigroup vs. Atari SA
Performance |
| Timeline |
| Citigroup |
| Atari SA |
Citigroup and Atari SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Atari SA
The main advantage of trading using opposite Citigroup and Atari SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Atari SA 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 Atari SA will offset losses from the drop in Atari SA's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Atari SA vs. Nacon Sa | Atari SA vs. Solutions 30 SE | Atari SA vs. OVH Groupe SAS | Atari SA vs. GECI International SA |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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