Correlation Between Citigroup and AutoNation
Can any of the company-specific risk be diversified away by investing in both Citigroup and AutoNation 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 AutoNation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and AutoNation, you can compare the effects of market volatilities on Citigroup and AutoNation 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 AutoNation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and AutoNation.
Diversification Opportunities for Citigroup and AutoNation
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and AutoNation is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and AutoNation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AutoNation 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 AutoNation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AutoNation has no effect on the direction of Citigroup i.e., Citigroup and AutoNation go up and down completely randomly.
Pair Corralation between Citigroup and AutoNation
Taking into account the 90-day investment horizon Citigroup is expected to generate 12.84 times less return on investment than AutoNation. In addition to that, Citigroup is 1.31 times more volatile than AutoNation. It trades about 0.01 of its total potential returns per unit of risk. AutoNation is currently generating about 0.1 per unit of volatility. If you would invest 16,505 in AutoNation on October 13, 2024 and sell it today you would earn a total of 295.00 from holding AutoNation or generate 1.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 85.0% |
| Values | Daily Returns |
Citigroup vs. AutoNation
Performance |
| Timeline |
| Citigroup |
| AutoNation |
Citigroup and AutoNation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and AutoNation
The main advantage of trading using opposite Citigroup and AutoNation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, AutoNation 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 AutoNation will offset losses from the drop in AutoNation's long position.| Citigroup vs. Nu Holdings | Citigroup vs. Canadian Imperial Bank | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
| AutoNation vs. ARDAGH METAL PACDL 0001 | AutoNation vs. De Grey Mining | AutoNation vs. Align Technology | AutoNation vs. Harmony Gold Mining |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |