Correlation Between Citigroup and ASA Gold
Can any of the company-specific risk be diversified away by investing in both Citigroup and ASA Gold 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 ASA Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and ASA Gold and, you can compare the effects of market volatilities on Citigroup and ASA Gold 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 ASA Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and ASA Gold.
Diversification Opportunities for Citigroup and ASA Gold
Very good diversification
The 3 months correlation between Citigroup and ASA is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and ASA Gold and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASA Gold 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 ASA Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASA Gold has no effect on the direction of Citigroup i.e., Citigroup and ASA Gold go up and down completely randomly.
Pair Corralation between Citigroup and ASA Gold
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.95 times more return on investment than ASA Gold. However, Citigroup is 1.05 times less risky than ASA Gold. It trades about 0.07 of its potential returns per unit of risk. ASA Gold and is currently generating about 0.05 per unit of risk. If you would invest 4,162 in Citigroup on September 19, 2024 and sell it today you would earn a total of 2,950 from holding Citigroup or generate 70.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. ASA Gold and
Performance |
| Timeline |
| Citigroup |
| ASA Gold |
Citigroup and ASA Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and ASA Gold
The main advantage of trading using opposite Citigroup and ASA Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, ASA Gold 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 ASA Gold will offset losses from the drop in ASA Gold's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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