Correlation Between Citigroup and ALPS Disruptive
Can any of the company-specific risk be diversified away by investing in both Citigroup and ALPS Disruptive 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 ALPS Disruptive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and ALPS Disruptive Technologies, you can compare the effects of market volatilities on Citigroup and ALPS Disruptive 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 ALPS Disruptive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and ALPS Disruptive.
Diversification Opportunities for Citigroup and ALPS Disruptive
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and ALPS is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and ALPS Disruptive Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALPS Disruptive Tech 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 ALPS Disruptive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALPS Disruptive Tech has no effect on the direction of Citigroup i.e., Citigroup and ALPS Disruptive go up and down completely randomly.
Pair Corralation between Citigroup and ALPS Disruptive
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.61 times more return on investment than ALPS Disruptive. However, Citigroup is 1.61 times more volatile than ALPS Disruptive Technologies. It trades about 0.08 of its potential returns per unit of risk. ALPS Disruptive Technologies is currently generating about 0.06 per unit of risk. If you would invest 4,685 in Citigroup on November 19, 2024 and sell it today you would earn a total of 3,776 from holding Citigroup or generate 80.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. ALPS Disruptive Technologies
Performance |
| Timeline |
| Citigroup |
| ALPS Disruptive Tech |
Citigroup and ALPS Disruptive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and ALPS Disruptive
The main advantage of trading using opposite Citigroup and ALPS Disruptive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, ALPS Disruptive 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 ALPS Disruptive will offset losses from the drop in ALPS Disruptive'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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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