Correlation Between Citigroup and Americafirst Defensive
Can any of the company-specific risk be diversified away by investing in both Citigroup and Americafirst Defensive 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 Americafirst Defensive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Americafirst Defensive Growth, you can compare the effects of market volatilities on Citigroup and Americafirst Defensive 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 Americafirst Defensive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Americafirst Defensive.
Diversification Opportunities for Citigroup and Americafirst Defensive
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Americafirst is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Americafirst Defensive Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Americafirst Defensive 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 Americafirst Defensive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Americafirst Defensive has no effect on the direction of Citigroup i.e., Citigroup and Americafirst Defensive go up and down completely randomly.
Pair Corralation between Citigroup and Americafirst Defensive
Taking into account the 90-day investment horizon Citigroup is expected to generate 9.44 times more return on investment than Americafirst Defensive. However, Citigroup is 9.44 times more volatile than Americafirst Defensive Growth. It trades about 0.23 of its potential returns per unit of risk. Americafirst Defensive Growth is currently generating about -0.1 per unit of risk. If you would invest 6,360 in Citigroup on August 27, 2024 and sell it today you would earn a total of 624.00 from holding Citigroup or generate 9.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Americafirst Defensive Growth
Performance |
| Timeline |
| Citigroup |
| Americafirst Defensive |
Citigroup and Americafirst Defensive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Americafirst Defensive
The main advantage of trading using opposite Citigroup and Americafirst Defensive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Americafirst Defensive 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 Americafirst Defensive will offset losses from the drop in Americafirst Defensive's long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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