Correlation Between Citigroup and ALR Technologies

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

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

Diversification Opportunities for Citigroup and ALR Technologies

-0.76

Correlation Coefficient

Citigroup  ALR Technologies

Pay attention - limited upside

The 3 months correlation between Citigroup and ALR is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and ALR Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALR Technologies 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 ALR Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALR Technologies has no effect on the direction of Citigroup i.e., Citigroup and ALR Technologies go up and down completely randomly.

Pair Corralation between Citigroup and ALR Technologies

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.13 times more return on investment than ALR Technologies. However, Citigroup is 7.91 times less risky than ALR Technologies. It trades about -0.03 of its potential returns per unit of risk. ALR Technologies is currently generating about -0.15 per unit of risk. If you would invest  6,984  in Citigroup on September 23, 2024 and sell it today you would lose (65.00) from holding Citigroup or give up 0.93% of portfolio value over 90 days.

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

Citigroup  vs.  ALR Technologies

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 uncertain fundamental indicators, Citigroup may actually be approaching a critical reversion point that can send shares even higher in January 2025.

ALR Technologies

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ALR Technologies are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, ALR Technologies may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Citigroup and ALR Technologies

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

The idea behind Citigroup and ALR Technologies 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.