Correlation Between Citigroup and Aeye
Can any of the company-specific risk be diversified away by investing in both Citigroup and Aeye 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 Aeye into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Aeye Inc, you can compare the effects of market volatilities on Citigroup and Aeye 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 Aeye. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Aeye.
Diversification Opportunities for Citigroup and Aeye
Very good diversification
The 3 months correlation between Citigroup and Aeye is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Aeye Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeye Inc 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 Aeye. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeye Inc has no effect on the direction of Citigroup i.e., Citigroup and Aeye go up and down completely randomly.
Pair Corralation between Citigroup and Aeye
Taking into account the 90-day investment horizon Citigroup is expected to generate 11.71 times less return on investment than Aeye. But when comparing it to its historical volatility, Citigroup is 8.7 times less risky than Aeye. It trades about 0.19 of its potential returns per unit of risk. Aeye Inc is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 95.00 in Aeye Inc on September 18, 2024 and sell it today you would earn a total of 35.00 from holding Aeye Inc or generate 36.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Aeye Inc
Performance |
| Timeline |
| Citigroup |
| Aeye Inc |
Citigroup and Aeye Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Aeye
The main advantage of trading using opposite Citigroup and Aeye positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Aeye 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 Aeye will offset losses from the drop in Aeye's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Aeye vs. Innoviz Technologies | Aeye vs. Luminar Technologies | Aeye vs. Quantumscape Corp | Aeye vs. Hyliion Holdings Corp |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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