Correlation Between Citigroup and AMCON Distributing
Can any of the company-specific risk be diversified away by investing in both Citigroup and AMCON Distributing 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 AMCON Distributing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and AMCON Distributing, you can compare the effects of market volatilities on Citigroup and AMCON Distributing 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 AMCON Distributing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and AMCON Distributing.
Diversification Opportunities for Citigroup and AMCON Distributing
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and AMCON is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and AMCON Distributing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMCON Distributing 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 AMCON Distributing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMCON Distributing has no effect on the direction of Citigroup i.e., Citigroup and AMCON Distributing go up and down completely randomly.
Pair Corralation between Citigroup and AMCON Distributing
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.42 times more return on investment than AMCON Distributing. However, Citigroup is 2.38 times less risky than AMCON Distributing. It trades about 0.23 of its potential returns per unit of risk. AMCON Distributing is currently generating about -0.08 per unit of risk. If you would invest 6,255 in Citigroup on August 24, 2024 and sell it today you would earn a total of 729.00 from holding Citigroup or generate 11.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Citigroup vs. AMCON Distributing
Performance |
| Timeline |
| Citigroup |
| AMCON Distributing |
Citigroup and AMCON Distributing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and AMCON Distributing
The main advantage of trading using opposite Citigroup and AMCON Distributing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, AMCON Distributing 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 AMCON Distributing will offset losses from the drop in AMCON Distributing'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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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