Correlation Between Citigroup and MediaAlpha
Can any of the company-specific risk be diversified away by investing in both Citigroup and MediaAlpha 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 MediaAlpha into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and MediaAlpha, you can compare the effects of market volatilities on Citigroup and MediaAlpha 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 MediaAlpha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and MediaAlpha.
Diversification Opportunities for Citigroup and MediaAlpha
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and MediaAlpha is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and MediaAlpha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MediaAlpha 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 MediaAlpha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MediaAlpha has no effect on the direction of Citigroup i.e., Citigroup and MediaAlpha go up and down completely randomly.
Pair Corralation between Citigroup and MediaAlpha
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.45 times more return on investment than MediaAlpha. However, Citigroup is 2.22 times less risky than MediaAlpha. It trades about 0.06 of its potential returns per unit of risk. MediaAlpha is currently generating about -0.05 per unit of risk. If you would invest 6,131 in Citigroup on August 24, 2024 and sell it today you would earn a total of 764.00 from holding Citigroup or generate 12.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. MediaAlpha
Performance |
| Timeline |
| Citigroup |
| MediaAlpha |
Citigroup and MediaAlpha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and MediaAlpha
The main advantage of trading using opposite Citigroup and MediaAlpha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, MediaAlpha 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 MediaAlpha will offset losses from the drop in MediaAlpha's long position.| Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Royal Bank of | Citigroup vs. JPMorgan Chase Co |
| MediaAlpha vs. Asset Entities Class | MediaAlpha vs. Yelp Inc | MediaAlpha vs. BuzzFeed | MediaAlpha vs. Vivid Seats |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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