Correlation Between Citigroup and Aquila Three
Can any of the company-specific risk be diversified away by investing in both Citigroup and Aquila Three 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 Aquila Three into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Aquila Three Peaks, you can compare the effects of market volatilities on Citigroup and Aquila Three 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 Aquila Three. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Aquila Three.
Diversification Opportunities for Citigroup and Aquila Three
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and Aquila is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Aquila Three Peaks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aquila Three Peaks 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 Aquila Three. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aquila Three Peaks has no effect on the direction of Citigroup i.e., Citigroup and Aquila Three go up and down completely randomly.
Pair Corralation between Citigroup and Aquila Three
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.21 times more return on investment than Aquila Three. However, Citigroup is 2.21 times more volatile than Aquila Three Peaks. It trades about 0.26 of its potential returns per unit of risk. Aquila Three Peaks is currently generating about 0.25 per unit of risk. If you would invest 6,361 in Citigroup on September 1, 2024 and sell it today you would earn a total of 726.00 from holding Citigroup or generate 11.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Aquila Three Peaks
Performance |
| Timeline |
| Citigroup |
| Aquila Three Peaks |
Citigroup and Aquila Three Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Aquila Three
The main advantage of trading using opposite Citigroup and Aquila Three positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Aquila Three 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 Aquila Three will offset losses from the drop in Aquila Three's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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