Correlation Between Citigroup and AALLN

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Can any of the company-specific risk be diversified away by investing in both Citigroup and AALLN 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 AALLN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and AALLN 3875 16 MAR 29, you can compare the effects of market volatilities on Citigroup and AALLN 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 AALLN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and AALLN.

Diversification Opportunities for Citigroup and AALLN

0.59
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Citigroup and AALLN is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and AALLN 3875 16 MAR 29 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AALLN 3875 16 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 AALLN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AALLN 3875 16 has no effect on the direction of Citigroup i.e., Citigroup and AALLN go up and down completely randomly.

Pair Corralation between Citigroup and AALLN

Taking into account the 90-day investment horizon Citigroup is expected to generate 7.16 times more return on investment than AALLN. However, Citigroup is 7.16 times more volatile than AALLN 3875 16 MAR 29. It trades about 0.21 of its potential returns per unit of risk. AALLN 3875 16 MAR 29 is currently generating about -0.3 per unit of risk. If you would invest  6,360  in Citigroup on August 29, 2024 and sell it today you would earn a total of  615.00  from holding Citigroup or generate 9.67% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy22.73%
ValuesDaily Returns

Citigroup  vs.  AALLN 3875 16 MAR 29

 Performance 
       Timeline  
Citigroup 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.
AALLN 3875 16 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days AALLN 3875 16 MAR 29 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, AALLN is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Citigroup and AALLN Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Citigroup and AALLN

The main advantage of trading using opposite Citigroup and AALLN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, AALLN 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 AALLN will offset losses from the drop in AALLN's long position.
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The idea behind Citigroup and AALLN 3875 16 MAR 29 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.

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