Correlation Between Citigroup and ALLIANZ TECHNOTRLS

Can any of the company-specific risk be diversified away by investing in both Citigroup and ALLIANZ TECHNOTRLS 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 ALLIANZ TECHNOTRLS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Citigroup and ALLIANZ TECHNOTRLS 025, you can compare the effects of market volatilities on Citigroup and ALLIANZ TECHNOTRLS 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 ALLIANZ TECHNOTRLS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and ALLIANZ TECHNOTRLS.

Diversification Opportunities for Citigroup and ALLIANZ TECHNOTRLS

0.88

Correlation Coefficient

Citigroup  ALLIANZ TECHNOTRLS

Very poor diversification

The 3 months correlation between Citigroup and ALLIANZ is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and ALLIANZ TECHNOTRLS 025 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALLIANZ TECHNOTRLS 025 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 ALLIANZ TECHNOTRLS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALLIANZ TECHNOTRLS 025 has no effect on the direction of Citigroup i.e., Citigroup and ALLIANZ TECHNOTRLS go up and down completely randomly.

Pair Corralation between Citigroup and ALLIANZ TECHNOTRLS

Taking into account the 90-day investment horizon Citigroup is expected to generate 22.11 times less return on investment than ALLIANZ TECHNOTRLS. But when comparing it to its historical volatility, Citigroup is 1.28 times less risky than ALLIANZ TECHNOTRLS. It trades about 0.01 of its potential returns per unit of risk. ALLIANZ TECHNOTRLS 025 is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  474.00  in ALLIANZ TECHNOTRLS 025 on September 30, 2024 and sell it today you would earn a total of  31.00  from holding ALLIANZ TECHNOTRLS 025 or generate 6.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	90.48%
Values	Daily Returns

Citigroup  vs.  ALLIANZ TECHNOTRLS 025

Citigroup

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 9 (%) 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.

ALLIANZ TECHNOTRLS 025

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ALLIANZ TECHNOTRLS 025 are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, ALLIANZ TECHNOTRLS reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and ALLIANZ TECHNOTRLS

The main advantage of trading using opposite Citigroup and ALLIANZ TECHNOTRLS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, ALLIANZ TECHNOTRLS 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 ALLIANZ TECHNOTRLS will offset losses from the drop in ALLIANZ TECHNOTRLS's long position.

The idea behind Citigroup and ALLIANZ TECHNOTRLS 025 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.