Correlation Between Citigroup and Aberdeen Emerging
Can any of the company-specific risk be diversified away by investing in both Citigroup and Aberdeen Emerging 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 Aberdeen Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Aberdeen Emerging Markets, you can compare the effects of market volatilities on Citigroup and Aberdeen Emerging 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 Aberdeen Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Aberdeen Emerging.
Diversification Opportunities for Citigroup and Aberdeen Emerging
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Citigroup and Aberdeen is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Aberdeen Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Emerging Markets 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 Aberdeen Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Emerging Markets has no effect on the direction of Citigroup i.e., Citigroup and Aberdeen Emerging go up and down completely randomly.
Pair Corralation between Citigroup and Aberdeen Emerging
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.45 times more return on investment than Aberdeen Emerging. However, Citigroup is 2.45 times more volatile than Aberdeen Emerging Markets. It trades about 0.26 of its potential returns per unit of risk. Aberdeen Emerging Markets is currently generating about -0.08 per unit of risk. If you would invest 6,361 in Citigroup on September 1, 2024 and sell it today you would earn a total of 726.00 from holding Citigroup or generate 11.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Citigroup vs. Aberdeen Emerging Markets
Performance |
| Timeline |
| Citigroup |
| Aberdeen Emerging Markets |
Citigroup and Aberdeen Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Aberdeen Emerging
The main advantage of trading using opposite Citigroup and Aberdeen Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Aberdeen Emerging 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 Aberdeen Emerging will offset losses from the drop in Aberdeen Emerging's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Aberdeen Emerging vs. Aberdeen Emerging Markets | Aberdeen Emerging vs. Aberdeen Emerging Markets | Aberdeen Emerging vs. Aberdeen Gbl Eq | Aberdeen Emerging vs. Aberdeen Gbl Eq |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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