Correlation Between Citigroup and Alpha Partners
Can any of the company-specific risk be diversified away by investing in both Citigroup and Alpha Partners 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 Alpha Partners into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Alpha Partners Technology, you can compare the effects of market volatilities on Citigroup and Alpha Partners 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 Alpha Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Alpha Partners.
Diversification Opportunities for Citigroup and Alpha Partners
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Alpha is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Alpha Partners Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpha Partners Technology 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 Alpha Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpha Partners Technology has no effect on the direction of Citigroup i.e., Citigroup and Alpha Partners go up and down completely randomly.
Pair Corralation between Citigroup and Alpha Partners
If you would invest 6,360 in Citigroup on August 27, 2024 and sell it today you would earn a total of 715.00 from holding Citigroup or generate 11.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Citigroup vs. Alpha Partners Technology
Performance |
| Timeline |
| Citigroup |
| Alpha Partners Technology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Citigroup and Alpha Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Alpha Partners
The main advantage of trading using opposite Citigroup and Alpha Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Alpha Partners 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 Alpha Partners will offset losses from the drop in Alpha Partners' long position.| Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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