Correlation Between Citigroup and AlphaTime Acquisition
Can any of the company-specific risk be diversified away by investing in both Citigroup and AlphaTime Acquisition 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 AlphaTime Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and AlphaTime Acquisition Corp, you can compare the effects of market volatilities on Citigroup and AlphaTime Acquisition 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 AlphaTime Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and AlphaTime Acquisition.
Diversification Opportunities for Citigroup and AlphaTime Acquisition
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citigroup and AlphaTime is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and AlphaTime Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AlphaTime Acquisition 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 AlphaTime Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AlphaTime Acquisition has no effect on the direction of Citigroup i.e., Citigroup and AlphaTime Acquisition go up and down completely randomly.
Pair Corralation between Citigroup and AlphaTime Acquisition
Taking into account the 90-day investment horizon Citigroup is expected to generate 5.78 times more return on investment than AlphaTime Acquisition. However, Citigroup is 5.78 times more volatile than AlphaTime Acquisition Corp. It trades about 0.33 of its potential returns per unit of risk. AlphaTime Acquisition Corp is currently generating about 0.04 per unit of risk. If you would invest 6,235 in Citigroup on September 4, 2024 and sell it today you would earn a total of 907.00 from holding Citigroup or generate 14.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. AlphaTime Acquisition Corp
Performance |
| Timeline |
| Citigroup |
| AlphaTime Acquisition |
Citigroup and AlphaTime Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and AlphaTime Acquisition
The main advantage of trading using opposite Citigroup and AlphaTime Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, AlphaTime Acquisition 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 AlphaTime Acquisition will offset losses from the drop in AlphaTime Acquisition's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| AlphaTime Acquisition vs. Horizon Space Acquisition | AlphaTime Acquisition vs. AlphaVest Acquisition Corp | AlphaTime Acquisition vs. Israel Acquisitions Corp |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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