Correlation Between Citigroup and Alpine Realty

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

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

Diversification Opportunities for Citigroup and Alpine Realty

-0.53

Correlation Coefficient

Citigroup  Alpine Realty

Excellent diversification

The 3 months correlation between Citigroup and Alpine is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Alpine Realty Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpine Realty Income 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 Alpine Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpine Realty Income has no effect on the direction of Citigroup i.e., Citigroup and Alpine Realty go up and down completely randomly.

Pair Corralation between Citigroup and Alpine Realty

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.45 times more return on investment than Alpine Realty. However, Citigroup is 1.45 times more volatile than Alpine Realty Income. It trades about 0.07 of its potential returns per unit of risk. Alpine Realty Income is currently generating about 0.01 per unit of risk. If you would invest  4,806  in Citigroup on October 23, 2024 and sell it today you would earn a total of  3,193  from holding Citigroup or generate 66.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Citigroup  vs.  Alpine Realty Income

Citigroup

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

Alpine Realty Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alpine Realty Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Citigroup and Alpine Realty

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

The idea behind Citigroup and Alpine Realty Income 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.