Correlation Between Citigroup and Ariel Fund
Can any of the company-specific risk be diversified away by investing in both Citigroup and Ariel Fund 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 Ariel Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Ariel Fund Institutional, you can compare the effects of market volatilities on Citigroup and Ariel Fund 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 Ariel Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Ariel Fund.
Diversification Opportunities for Citigroup and Ariel Fund
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Citigroup and Ariel is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Ariel Fund Institutional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ariel Fund Institutional 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 Ariel Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ariel Fund Institutional has no effect on the direction of Citigroup i.e., Citigroup and Ariel Fund go up and down completely randomly.
Pair Corralation between Citigroup and Ariel Fund
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.35 times more return on investment than Ariel Fund. However, Citigroup is 1.35 times more volatile than Ariel Fund Institutional. It trades about 0.13 of its potential returns per unit of risk. Ariel Fund Institutional is currently generating about 0.1 per unit of risk. If you would invest 4,053 in Citigroup on September 1, 2024 and sell it today you would earn a total of 3,034 from holding Citigroup or generate 74.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Ariel Fund Institutional
Performance |
| Timeline |
| Citigroup |
| Ariel Fund Institutional |
Citigroup and Ariel Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Ariel Fund
The main advantage of trading using opposite Citigroup and Ariel Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Ariel Fund 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 Ariel Fund will offset losses from the drop in Ariel Fund's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Ariel Fund vs. Calamos Dynamic Convertible | Ariel Fund vs. Columbia Vertible Securities | Ariel Fund vs. Advent Claymore Convertible | Ariel Fund vs. Gabelli Convertible And |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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