Correlation Between Citigroup and Angel Oak
Can any of the company-specific risk be diversified away by investing in both Citigroup and Angel Oak 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 Angel Oak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Angel Oak Mortgage, you can compare the effects of market volatilities on Citigroup and Angel Oak 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 Angel Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Angel Oak.
Diversification Opportunities for Citigroup and Angel Oak
Very good diversification
The 3 months correlation between Citigroup and Angel is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Angel Oak Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Angel Oak Mortgage 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 Angel Oak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Angel Oak Mortgage has no effect on the direction of Citigroup i.e., Citigroup and Angel Oak go up and down completely randomly.
Pair Corralation between Citigroup and Angel Oak
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.48 times more return on investment than Angel Oak. However, Citigroup is 1.48 times more volatile than Angel Oak Mortgage. It trades about 0.15 of its potential returns per unit of risk. Angel Oak Mortgage is currently generating about -0.07 per unit of risk. If you would invest 6,205 in Citigroup on August 31, 2024 and sell it today you would earn a total of 811.00 from holding Citigroup or generate 13.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Angel Oak Mortgage
Performance |
| Timeline |
| Citigroup |
| Angel Oak Mortgage |
Citigroup and Angel Oak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Angel Oak
The main advantage of trading using opposite Citigroup and Angel Oak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Angel Oak 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 Angel Oak will offset losses from the drop in Angel Oak's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Angel Oak vs. Granite Point Mortgage | Angel Oak vs. MFA Financial | Angel Oak vs. Two Harbors Investments | Angel Oak vs. PennyMac Mortgage Investment |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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