Correlation Between Citigroup and Amplify Thematic
Can any of the company-specific risk be diversified away by investing in both Citigroup and Amplify Thematic 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 Amplify Thematic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Amplify Thematic All Stars, you can compare the effects of market volatilities on Citigroup and Amplify Thematic 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 Amplify Thematic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Amplify Thematic.
Diversification Opportunities for Citigroup and Amplify Thematic
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and Amplify is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Amplify Thematic All Stars in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amplify Thematic All 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 Amplify Thematic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amplify Thematic All has no effect on the direction of Citigroup i.e., Citigroup and Amplify Thematic go up and down completely randomly.
Pair Corralation between Citigroup and Amplify Thematic
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.55 times more return on investment than Amplify Thematic. However, Citigroup is 1.55 times more volatile than Amplify Thematic All Stars. It trades about 0.29 of its potential returns per unit of risk. Amplify Thematic All Stars is currently generating about 0.27 per unit of risk. If you would invest 6,122 in Citigroup on August 26, 2024 and sell it today you would earn a total of 862.00 from holding Citigroup or generate 14.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Amplify Thematic All Stars
Performance |
| Timeline |
| Citigroup |
| Amplify Thematic All |
Citigroup and Amplify Thematic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Amplify Thematic
The main advantage of trading using opposite Citigroup and Amplify Thematic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Amplify Thematic 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 Amplify Thematic will offset losses from the drop in Amplify Thematic's long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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