Correlation Between Citigroup and AN2 Therapeutics
Can any of the company-specific risk be diversified away by investing in both Citigroup and AN2 Therapeutics 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 AN2 Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and AN2 Therapeutics, you can compare the effects of market volatilities on Citigroup and AN2 Therapeutics 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 AN2 Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and AN2 Therapeutics.
Diversification Opportunities for Citigroup and AN2 Therapeutics
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Citigroup and AN2 is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and AN2 Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AN2 Therapeutics 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 AN2 Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AN2 Therapeutics has no effect on the direction of Citigroup i.e., Citigroup and AN2 Therapeutics go up and down completely randomly.
Pair Corralation between Citigroup and AN2 Therapeutics
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.4 times less return on investment than AN2 Therapeutics. But when comparing it to its historical volatility, Citigroup is 2.8 times less risky than AN2 Therapeutics. It trades about 0.25 of its potential returns per unit of risk. AN2 Therapeutics is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 110.00 in AN2 Therapeutics on August 27, 2024 and sell it today you would earn a total of 29.00 from holding AN2 Therapeutics or generate 26.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. AN2 Therapeutics
Performance |
| Timeline |
| Citigroup |
| AN2 Therapeutics |
Citigroup and AN2 Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and AN2 Therapeutics
The main advantage of trading using opposite Citigroup and AN2 Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, AN2 Therapeutics 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 AN2 Therapeutics will offset losses from the drop in AN2 Therapeutics' long position.| Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
| AN2 Therapeutics vs. Aerovate Therapeutics | AN2 Therapeutics vs. Adagene | AN2 Therapeutics vs. Acrivon Therapeutics, Common | AN2 Therapeutics vs. Rezolute |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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