Correlation Between Citigroup and Alger Spectra
Can any of the company-specific risk be diversified away by investing in both Citigroup and Alger Spectra 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 Alger Spectra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Alger Spectra Fund, you can compare the effects of market volatilities on Citigroup and Alger Spectra 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 Alger Spectra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Alger Spectra.
Diversification Opportunities for Citigroup and Alger Spectra
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Citigroup and Alger is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Alger Spectra Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Spectra 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 Alger Spectra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Spectra has no effect on the direction of Citigroup i.e., Citigroup and Alger Spectra go up and down completely randomly.
Pair Corralation between Citigroup and Alger Spectra
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.16 times less return on investment than Alger Spectra. In addition to that, Citigroup is 1.39 times more volatile than Alger Spectra Fund. It trades about 0.07 of its total potential returns per unit of risk. Alger Spectra Fund is currently generating about 0.12 per unit of volatility. If you would invest 2,486 in Alger Spectra Fund on September 1, 2024 and sell it today you would earn a total of 533.00 from holding Alger Spectra Fund or generate 21.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
Citigroup vs. Alger Spectra Fund
Performance |
| Timeline |
| Citigroup |
| Alger Spectra |
Citigroup and Alger Spectra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Alger Spectra
The main advantage of trading using opposite Citigroup and Alger Spectra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Alger Spectra 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 Alger Spectra will offset losses from the drop in Alger Spectra's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Alger Spectra vs. Alger Midcap Growth | Alger Spectra vs. Alger Midcap Growth | Alger Spectra vs. Alger Mid Cap | Alger Spectra vs. Alger Small Cap |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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