Correlation Between Citigroup and AFFLUENT MEDICAL
Can any of the company-specific risk be diversified away by investing in both Citigroup and AFFLUENT MEDICAL 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 AFFLUENT MEDICAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and AFFLUENT MEDICAL SAS, you can compare the effects of market volatilities on Citigroup and AFFLUENT MEDICAL 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 AFFLUENT MEDICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and AFFLUENT MEDICAL.
Diversification Opportunities for Citigroup and AFFLUENT MEDICAL
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and AFFLUENT is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and AFFLUENT MEDICAL SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AFFLUENT MEDICAL SAS 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 AFFLUENT MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AFFLUENT MEDICAL SAS has no effect on the direction of Citigroup i.e., Citigroup and AFFLUENT MEDICAL go up and down completely randomly.
Pair Corralation between Citigroup and AFFLUENT MEDICAL
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.1 times less return on investment than AFFLUENT MEDICAL. But when comparing it to its historical volatility, Citigroup is 3.7 times less risky than AFFLUENT MEDICAL. It trades about 0.06 of its potential returns per unit of risk. AFFLUENT MEDICAL SAS is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 166.00 in AFFLUENT MEDICAL SAS on October 11, 2024 and sell it today you would lose (28.00) from holding AFFLUENT MEDICAL SAS or give up 16.87% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 99.0% |
Values | Daily Returns |
Citigroup vs. AFFLUENT MEDICAL SAS
Performance |
Timeline |
Citigroup |
AFFLUENT MEDICAL SAS |
Citigroup and AFFLUENT MEDICAL Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Citigroup and AFFLUENT MEDICAL
The main advantage of trading using opposite Citigroup and AFFLUENT MEDICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, AFFLUENT MEDICAL 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 AFFLUENT MEDICAL will offset losses from the drop in AFFLUENT MEDICAL's long position.Citigroup vs. Royal Bank of | Citigroup vs. JPMorgan Chase Co | Citigroup vs. Nu Holdings | Citigroup vs. Canadian Imperial Bank |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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