Correlation Between Citigroup and American Century
Can any of the company-specific risk be diversified away by investing in both Citigroup and American Century 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 American Century into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and American Century ETF, you can compare the effects of market volatilities on Citigroup and American Century 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 American Century. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and American Century.
Diversification Opportunities for Citigroup and American Century
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Citigroup and American is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and American Century ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Century ETF 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 American Century. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Century ETF has no effect on the direction of Citigroup i.e., Citigroup and American Century go up and down completely randomly.
Pair Corralation between Citigroup and American Century
Taking into account the 90-day investment horizon Citigroup is expected to generate 20.41 times less return on investment than American Century. But when comparing it to its historical volatility, Citigroup is 30.14 times less risky than American Century. It trades about 0.08 of its potential returns per unit of risk. American Century ETF is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 0.00 in American Century ETF on November 2, 2024 and sell it today you would earn a total of 5,966 from holding American Century ETF or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 80.97% |
| Values | Daily Returns |
Citigroup vs. American Century ETF
Performance |
| Timeline |
| Citigroup |
| American Century ETF |
Citigroup and American Century Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and American Century
The main advantage of trading using opposite Citigroup and American Century positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, American Century 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 American Century will offset losses from the drop in American Century's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| American Century vs. First Trust Multi Asset | American Century vs. Collaborative Investment Series | American Century vs. Northern Lights | American Century vs. Ocean Park International |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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