Correlation Between Citigroup and AXA World
Can any of the company-specific risk be diversified away by investing in both Citigroup and AXA World 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 AXA World into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and AXA World Funds, you can compare the effects of market volatilities on Citigroup and AXA World 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 AXA World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and AXA World.
Diversification Opportunities for Citigroup and AXA World
Pay attention - limited upside
The 3 months correlation between Citigroup and AXA is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and AXA World Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AXA World Funds 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 AXA World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AXA World Funds has no effect on the direction of Citigroup i.e., Citigroup and AXA World go up and down completely randomly.
Pair Corralation between Citigroup and AXA World
Taking into account the 90-day investment horizon Citigroup is expected to generate 3.05 times more return on investment than AXA World. However, Citigroup is 3.05 times more volatile than AXA World Funds. It trades about 0.09 of its potential returns per unit of risk. AXA World Funds is currently generating about -0.01 per unit of risk. If you would invest 5,476 in Citigroup on September 1, 2024 and sell it today you would earn a total of 1,611 from holding Citigroup or generate 29.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.47% |
| Values | Daily Returns |
Citigroup vs. AXA World Funds
Performance |
| Timeline |
| Citigroup |
| AXA World Funds |
Citigroup and AXA World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and AXA World
The main advantage of trading using opposite Citigroup and AXA World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, AXA World 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 AXA World will offset losses from the drop in AXA World's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| AXA World vs. AXA World Funds | AXA World vs. Esfera Robotics R | AXA World vs. R co Valor F | AXA World vs. CM AM Monplus NE |
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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