Correlation Between Citigroup and Aggressive Balanced
Can any of the company-specific risk be diversified away by investing in both Citigroup and Aggressive Balanced 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 Aggressive Balanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Aggressive Balanced Allocation, you can compare the effects of market volatilities on Citigroup and Aggressive Balanced 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 Aggressive Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Aggressive Balanced.
Diversification Opportunities for Citigroup and Aggressive Balanced
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and Aggressive is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Aggressive Balanced Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aggressive Balanced 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 Aggressive Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aggressive Balanced has no effect on the direction of Citigroup i.e., Citigroup and Aggressive Balanced go up and down completely randomly.
Pair Corralation between Citigroup and Aggressive Balanced
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.62 times more return on investment than Aggressive Balanced. However, Citigroup is 2.62 times more volatile than Aggressive Balanced Allocation. It trades about 0.07 of its potential returns per unit of risk. Aggressive Balanced Allocation is currently generating about 0.09 per unit of risk. If you would invest 4,206 in Citigroup on August 25, 2024 and sell it today you would earn a total of 2,778 from holding Citigroup or generate 66.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Aggressive Balanced Allocation
Performance |
| Timeline |
| Citigroup |
| Aggressive Balanced |
Citigroup and Aggressive Balanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Aggressive Balanced
The main advantage of trading using opposite Citigroup and Aggressive Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Aggressive Balanced 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 Aggressive Balanced will offset losses from the drop in Aggressive Balanced's long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
| Aggressive Balanced vs. Salient Alternative Beta | Aggressive Balanced vs. Salient Alternative Beta | Aggressive Balanced vs. Moderately Aggressive Balanced | Aggressive Balanced vs. Salient Mlp Fund |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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