Correlation Between Citigroup and Aimfinity Investment

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

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

Diversification Opportunities for Citigroup and Aimfinity Investment

-0.12

Correlation Coefficient

Citigroup  Aimfinity Investment

Good diversification

The 3 months correlation between Citigroup and Aimfinity is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Aimfinity Investment I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aimfinity Investment 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 Aimfinity Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aimfinity Investment has no effect on the direction of Citigroup i.e., Citigroup and Aimfinity Investment go up and down completely randomly.

Pair Corralation between Citigroup and Aimfinity Investment

Taking into account the 90-day investment horizon Citigroup is expected to generate 7.68 times less return on investment than Aimfinity Investment. But when comparing it to its historical volatility, Citigroup is 1.65 times less risky than Aimfinity Investment. It trades about 0.01 of its potential returns per unit of risk. Aimfinity Investment I is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  1,210  in Aimfinity Investment I on December 29, 2024 and sell it today you would earn a total of  137.00  from holding Aimfinity Investment I or generate 11.32% return on investment over 90 days.

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

Citigroup  vs.  Aimfinity Investment I

Citigroup

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 1 (%) 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.

Aimfinity Investment

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Aimfinity Investment I are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Aimfinity Investment unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and Aimfinity Investment

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

The idea behind Citigroup and Aimfinity Investment I 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.