Correlation Between Citigroup and Aim Investment
Can any of the company-specific risk be diversified away by investing in both Citigroup and Aim Investment 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 Aim Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Aim Investment Secs, you can compare the effects of market volatilities on Citigroup and Aim Investment 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 Aim Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Aim Investment.
Diversification Opportunities for Citigroup and Aim Investment
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Aim is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Aim Investment Secs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aim Investment Secs 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 Aim Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aim Investment Secs has no effect on the direction of Citigroup i.e., Citigroup and Aim Investment go up and down completely randomly.
Pair Corralation between Citigroup and Aim Investment
Taking into account the 90-day investment horizon Citigroup is expected to generate 11.63 times more return on investment than Aim Investment. However, Citigroup is 11.63 times more volatile than Aim Investment Secs. It trades about 0.07 of its potential returns per unit of risk. Aim Investment Secs is currently generating about 0.14 per unit of risk. If you would invest 4,218 in Citigroup on September 2, 2024 and sell it today you would earn a total of 2,869 from holding Citigroup or generate 68.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Aim Investment Secs
Performance |
| Timeline |
| Citigroup |
| Aim Investment Secs |
Citigroup and Aim Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Aim Investment
The main advantage of trading using opposite Citigroup and Aim Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Aim Investment 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 Aim Investment will offset losses from the drop in Aim Investment's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Aim Investment vs. Vanguard Total Stock | Aim Investment vs. Vanguard 500 Index | Aim Investment vs. Vanguard Total Stock | Aim Investment vs. Vanguard Total Stock |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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