Correlation Between Citigroup and Amg Renaissance
Can any of the company-specific risk be diversified away by investing in both Citigroup and Amg Renaissance 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 Amg Renaissance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Amg Renaissance Large, you can compare the effects of market volatilities on Citigroup and Amg Renaissance 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 Amg Renaissance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Amg Renaissance.
Diversification Opportunities for Citigroup and Amg Renaissance
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and Amg is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Amg Renaissance Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Renaissance Large 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 Amg Renaissance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amg Renaissance Large has no effect on the direction of Citigroup i.e., Citigroup and Amg Renaissance go up and down completely randomly.
Pair Corralation between Citigroup and Amg Renaissance
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.01 times more return on investment than Amg Renaissance. However, Citigroup is 2.01 times more volatile than Amg Renaissance Large. It trades about 0.25 of its potential returns per unit of risk. Amg Renaissance Large is currently generating about 0.32 per unit of risk. If you would invest 6,360 in Citigroup on August 28, 2024 and sell it today you would earn a total of 715.00 from holding Citigroup or generate 11.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Citigroup vs. Amg Renaissance Large
Performance |
| Timeline |
| Citigroup |
| Amg Renaissance Large |
Citigroup and Amg Renaissance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Amg Renaissance
The main advantage of trading using opposite Citigroup and Amg Renaissance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Amg Renaissance 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 Amg Renaissance will offset losses from the drop in Amg Renaissance's long position.The idea behind Citigroup and Amg Renaissance Large pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Amg Renaissance vs. Rational Strategic Allocation | Amg Renaissance vs. Goldman Sachs Large | Amg Renaissance vs. Legg Mason Bw | Amg Renaissance vs. T Rowe Price |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |