Correlation Between Citigroup and Ally Leasehold
Can any of the company-specific risk be diversified away by investing in both Citigroup and Ally Leasehold 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 Ally Leasehold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Ally Leasehold Real, you can compare the effects of market volatilities on Citigroup and Ally Leasehold 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 Ally Leasehold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Ally Leasehold.
Diversification Opportunities for Citigroup and Ally Leasehold
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citigroup and Ally is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Ally Leasehold Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ally Leasehold Real 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 Ally Leasehold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ally Leasehold Real has no effect on the direction of Citigroup i.e., Citigroup and Ally Leasehold go up and down completely randomly.
Pair Corralation between Citigroup and Ally Leasehold
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.36 times more return on investment than Ally Leasehold. However, Citigroup is 1.36 times more volatile than Ally Leasehold Real. It trades about 0.08 of its potential returns per unit of risk. Ally Leasehold Real is currently generating about 0.07 per unit of risk. If you would invest 5,992 in Citigroup on September 2, 2024 and sell it today you would earn a total of 1,095 from holding Citigroup or generate 18.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Citigroup vs. Ally Leasehold Real
Performance |
| Timeline |
| Citigroup |
| Ally Leasehold Real |
Citigroup and Ally Leasehold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Ally Leasehold
The main advantage of trading using opposite Citigroup and Ally Leasehold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Ally Leasehold 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 Ally Leasehold will offset losses from the drop in Ally Leasehold'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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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