Correlation Between Citigroup and Aguila American

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

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

Diversification Opportunities for Citigroup and Aguila American

0.18

Correlation Coefficient

Citigroup  Aguila American

Average diversification

The 3 months correlation between Citigroup and Aguila is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Aguila American Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aguila American Gold 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 Aguila American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aguila American Gold has no effect on the direction of Citigroup i.e., Citigroup and Aguila American go up and down completely randomly.

Pair Corralation between Citigroup and Aguila American

If you would invest  28.00  in Aguila American Gold on September 23, 2024 and sell it today you would earn a total of  0.00  from holding Aguila American Gold or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

Citigroup  vs.  Aguila American Gold

Citigroup

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Citigroup may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Aguila American Gold

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days Aguila American Gold has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile basic indicators, Aguila American reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and Aguila American

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

The idea behind Citigroup and Aguila American Gold 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 Anywhere module to track or share privately all of your investments from the convenience of any device.