Correlation Between Citigroup and Alarko Carrier
Can any of the company-specific risk be diversified away by investing in both Citigroup and Alarko Carrier 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 Alarko Carrier into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Alarko Carrier Sanayi, you can compare the effects of market volatilities on Citigroup and Alarko Carrier 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 Alarko Carrier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Alarko Carrier.
Diversification Opportunities for Citigroup and Alarko Carrier
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and Alarko is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Alarko Carrier Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alarko Carrier Sanayi 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 Alarko Carrier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alarko Carrier Sanayi has no effect on the direction of Citigroup i.e., Citigroup and Alarko Carrier go up and down completely randomly.
Pair Corralation between Citigroup and Alarko Carrier
Taking into account the 90-day investment horizon Citigroup is expected to under-perform the Alarko Carrier. But the stock apears to be less risky and, when comparing its historical volatility, Citigroup is 2.03 times less risky than Alarko Carrier. The stock trades about -0.06 of its potential returns per unit of risk. The Alarko Carrier Sanayi is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 101,900 in Alarko Carrier Sanayi on October 7, 2024 and sell it today you would earn a total of 800.00 from holding Alarko Carrier Sanayi or generate 0.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Citigroup vs. Alarko Carrier Sanayi
Performance |
| Timeline |
| Citigroup |
| Alarko Carrier Sanayi |
Citigroup and Alarko Carrier Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Alarko Carrier
The main advantage of trading using opposite Citigroup and Alarko Carrier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Alarko Carrier 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 Alarko Carrier will offset losses from the drop in Alarko Carrier's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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