Correlation Between Citigroup and Alphacentric Symmetry
Can any of the company-specific risk be diversified away by investing in both Citigroup and Alphacentric Symmetry 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 Alphacentric Symmetry into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Alphacentric Symmetry Strategy, you can compare the effects of market volatilities on Citigroup and Alphacentric Symmetry 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 Alphacentric Symmetry. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Alphacentric Symmetry.
Diversification Opportunities for Citigroup and Alphacentric Symmetry
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Citigroup and Alphacentric is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Alphacentric Symmetry Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alphacentric Symmetry 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 Alphacentric Symmetry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alphacentric Symmetry has no effect on the direction of Citigroup i.e., Citigroup and Alphacentric Symmetry go up and down completely randomly.
Pair Corralation between Citigroup and Alphacentric Symmetry
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.9 times more return on investment than Alphacentric Symmetry. However, Citigroup is 2.9 times more volatile than Alphacentric Symmetry Strategy. It trades about 0.06 of its potential returns per unit of risk. Alphacentric Symmetry Strategy is currently generating about 0.04 per unit of risk. If you would invest 4,600 in Citigroup on September 4, 2024 and sell it today you would earn a total of 2,539 from holding Citigroup or generate 55.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Alphacentric Symmetry Strategy
Performance |
| Timeline |
| Citigroup |
| Alphacentric Symmetry |
Citigroup and Alphacentric Symmetry Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Alphacentric Symmetry
The main advantage of trading using opposite Citigroup and Alphacentric Symmetry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Alphacentric Symmetry 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 Alphacentric Symmetry will offset losses from the drop in Alphacentric Symmetry's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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