Correlation Between Citigroup and Aeglea Bio

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

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

Diversification Opportunities for Citigroup and Aeglea Bio

0.0

Correlation Coefficient

Citigroup  Aeglea Bio

Pay attention - limited upside

The 3 months correlation between Citigroup and Aeglea is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Aeglea Bio Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeglea Bio Therapeutics 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 Aeglea Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeglea Bio Therapeutics has no effect on the direction of Citigroup i.e., Citigroup and Aeglea Bio go up and down completely randomly.

Pair Corralation between Citigroup and Aeglea Bio

If you would invest  6,991  in Citigroup on December 28, 2024 and sell it today you would earn a total of  194.00  from holding Citigroup or generate 2.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Citigroup  vs.  Aeglea Bio Therapeutics

Citigroup

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Citigroup is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Aeglea Bio Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aeglea Bio Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound essential indicators, Aeglea Bio is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Citigroup and Aeglea Bio

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

The idea behind Citigroup and Aeglea Bio Therapeutics 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.