Correlation Between Citigroup and Amicus Therapeutics
Can any of the company-specific risk be diversified away by investing in both Citigroup and Amicus Therapeutics 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 Amicus Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Amicus Therapeutics, you can compare the effects of market volatilities on Citigroup and Amicus Therapeutics 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 Amicus Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Amicus Therapeutics.
Diversification Opportunities for Citigroup and Amicus Therapeutics
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and Amicus is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Amicus Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amicus Therapeutics 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 Amicus Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amicus Therapeutics has no effect on the direction of Citigroup i.e., Citigroup and Amicus Therapeutics go up and down completely randomly.
Pair Corralation between Citigroup and Amicus Therapeutics
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.22 times more return on investment than Amicus Therapeutics. However, Citigroup is 1.22 times more volatile than Amicus Therapeutics. It trades about 0.42 of its potential returns per unit of risk. Amicus Therapeutics is currently generating about -0.13 per unit of risk. If you would invest 6,919 in Citigroup on October 21, 2024 and sell it today you would earn a total of 1,080 from holding Citigroup or generate 15.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Amicus Therapeutics
Performance |
| Timeline |
| Citigroup |
| Amicus Therapeutics |
Citigroup and Amicus Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Amicus Therapeutics
The main advantage of trading using opposite Citigroup and Amicus Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Amicus Therapeutics 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 Amicus Therapeutics will offset losses from the drop in Amicus Therapeutics' long position.| Citigroup vs. Bank of Montreal | Citigroup vs. Canadian Imperial Bank | Citigroup vs. Bank of Nova | Citigroup vs. JPMorgan Chase Co |
| Amicus Therapeutics vs. Incyte | Amicus Therapeutics vs. Denali Therapeutics | Amicus Therapeutics vs. argenx NV ADR | Amicus Therapeutics vs. Harmony Biosciences Holdings |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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