Correlation Between Citigroup and Argosy Research

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

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

Diversification Opportunities for Citigroup and Argosy Research

0.33

Correlation Coefficient

Citigroup  Argosy Research

Weak diversification

The 3 months correlation between Citigroup and Argosy is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Argosy Research in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argosy Research 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 Argosy Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argosy Research has no effect on the direction of Citigroup i.e., Citigroup and Argosy Research go up and down completely randomly.

Pair Corralation between Citigroup and Argosy Research

Taking into account the 90-day investment horizon Citigroup is expected to generate 3.32 times less return on investment than Argosy Research. But when comparing it to its historical volatility, Citigroup is 1.04 times less risky than Argosy Research. It trades about 0.02 of its potential returns per unit of risk. Argosy Research is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  15,500  in Argosy Research on September 26, 2024 and sell it today you would earn a total of  250.00  from holding Argosy Research or generate 1.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Citigroup  vs.  Argosy Research

Citigroup

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 10 (%) 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.

Argosy Research

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Argosy Research are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Argosy Research is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Citigroup and Argosy Research

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

The idea behind Citigroup and Argosy Research 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.