Correlation Between Citigroup and Aberdeen Small
Can any of the company-specific risk be diversified away by investing in both Citigroup and Aberdeen Small 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 Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Aberdeen Small Cap, you can compare the effects of market volatilities on Citigroup and Aberdeen Small 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 Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Aberdeen Small.
Diversification Opportunities for Citigroup and Aberdeen Small
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Citigroup and Aberdeen is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Aberdeen Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Small Cap 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 Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Small Cap has no effect on the direction of Citigroup i.e., Citigroup and Aberdeen Small go up and down completely randomly.
Pair Corralation between Citigroup and Aberdeen Small
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.36 times more return on investment than Aberdeen Small. However, Citigroup is 1.36 times more volatile than Aberdeen Small Cap. It trades about 0.1 of its potential returns per unit of risk. Aberdeen Small Cap is currently generating about 0.06 per unit of risk. If you would invest 4,357 in Citigroup on August 26, 2024 and sell it today you would earn a total of 2,627 from holding Citigroup or generate 60.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Aberdeen Small Cap
Performance |
| Timeline |
| Citigroup |
| Aberdeen Small Cap |
Citigroup and Aberdeen Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Aberdeen Small
The main advantage of trading using opposite Citigroup and Aberdeen Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Aberdeen Small 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 Small will offset losses from the drop in Aberdeen Small's long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
| Aberdeen Small vs. Aberdeen Small Cap | Aberdeen Small vs. Needham Aggressive Growth | Aberdeen Small vs. Aquagold International | Aberdeen Small vs. Morningstar Unconstrained Allocation |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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