Correlation Between Citigroup and Alphatec Holdings
Can any of the company-specific risk be diversified away by investing in both Citigroup and Alphatec Holdings 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 Alphatec Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Alphatec Holdings, you can compare the effects of market volatilities on Citigroup and Alphatec Holdings 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 Alphatec Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Alphatec Holdings.
Diversification Opportunities for Citigroup and Alphatec Holdings
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Alphatec is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Alphatec Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alphatec Holdings 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 Alphatec Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alphatec Holdings has no effect on the direction of Citigroup i.e., Citigroup and Alphatec Holdings go up and down completely randomly.
Pair Corralation between Citigroup and Alphatec Holdings
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.4 times more return on investment than Alphatec Holdings. However, Citigroup is 2.48 times less risky than Alphatec Holdings. It trades about 0.07 of its potential returns per unit of risk. Alphatec Holdings is currently generating about 0.02 per unit of risk. If you would invest 4,117 in Citigroup on August 28, 2024 and sell it today you would earn a total of 2,958 from holding Citigroup or generate 71.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Alphatec Holdings
Performance |
| Timeline |
| Citigroup |
| Alphatec Holdings |
Citigroup and Alphatec Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Alphatec Holdings
The main advantage of trading using opposite Citigroup and Alphatec Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Alphatec Holdings 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 Alphatec Holdings will offset losses from the drop in Alphatec Holdings' long position.| Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
| Alphatec Holdings vs. Globus Medical | Alphatec Holdings vs. Orthofix Medical | Alphatec Holdings vs. CONMED | Alphatec Holdings vs. LivaNova PLC |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |