Correlation Between Citigroup and Aberdeen Japan
Can any of the company-specific risk be diversified away by investing in both Citigroup and Aberdeen Japan 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 Aberdeen Japan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Aberdeen Japan Equity, you can compare the effects of market volatilities on Citigroup and Aberdeen Japan 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 Aberdeen Japan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Aberdeen Japan.
Diversification Opportunities for Citigroup and Aberdeen Japan
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Aberdeen is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Aberdeen Japan Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Japan Equity 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 Aberdeen Japan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Japan Equity has no effect on the direction of Citigroup i.e., Citigroup and Aberdeen Japan go up and down completely randomly.
Pair Corralation between Citigroup and Aberdeen Japan
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.84 times more return on investment than Aberdeen Japan. However, Citigroup is 1.84 times more volatile than Aberdeen Japan Equity. It trades about 0.13 of its potential returns per unit of risk. Aberdeen Japan Equity is currently generating about -0.1 per unit of risk. If you would invest 6,205 in Citigroup on September 29, 2024 and sell it today you would earn a total of 895.00 from holding Citigroup or generate 14.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Citigroup vs. Aberdeen Japan Equity
Performance |
| Timeline |
| Citigroup |
| Aberdeen Japan Equity |
Citigroup and Aberdeen Japan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Aberdeen Japan
The main advantage of trading using opposite Citigroup and Aberdeen Japan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Aberdeen Japan 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 Aberdeen Japan will offset losses from the drop in Aberdeen Japan's long position.The idea behind Citigroup and Aberdeen Japan Equity 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.| Aberdeen Japan vs. Aqr Diversified Arbitrage | Aberdeen Japan vs. Wilmington Diversified Income | Aberdeen Japan vs. Tax Free Conservative Income | Aberdeen Japan vs. Fidelity Advisor Diversified |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |