Correlation Between Citigroup and Astra Energy
Can any of the company-specific risk be diversified away by investing in both Citigroup and Astra Energy 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 Astra Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Astra Energy, you can compare the effects of market volatilities on Citigroup and Astra Energy 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 Astra Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Astra Energy.
Diversification Opportunities for Citigroup and Astra Energy
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and Astra is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Astra Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astra Energy 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 Astra Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astra Energy has no effect on the direction of Citigroup i.e., Citigroup and Astra Energy go up and down completely randomly.
Pair Corralation between Citigroup and Astra Energy
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.68 times less return on investment than Astra Energy. But when comparing it to its historical volatility, Citigroup is 6.26 times less risky than Astra Energy. It trades about 0.07 of its potential returns per unit of risk. Astra Energy is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 30.00 in Astra Energy on August 31, 2024 and sell it today you would lose (19.00) from holding Astra Energy or give up 63.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Citigroup vs. Astra Energy
Performance |
| Timeline |
| Citigroup |
| Astra Energy |
Citigroup and Astra Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Astra Energy
The main advantage of trading using opposite Citigroup and Astra Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Astra Energy 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 Astra Energy will offset losses from the drop in Astra Energy's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Astra Energy vs. Alternus Energy Group | Astra Energy vs. American Security Resources | Astra Energy vs. Carnegie Clean Energy | Astra Energy vs. Altius Renewable Royalties |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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