Correlation Between Citigroup and Ashmore Asset

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

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

Diversification Opportunities for Citigroup and Ashmore Asset

0.14

Correlation Coefficient

Citigroup  Ashmore Asset

Average diversification

The 3 months correlation between Citigroup and Ashmore is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Ashmore Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ashmore Asset Management 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 Ashmore Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ashmore Asset Management has no effect on the direction of Citigroup i.e., Citigroup and Ashmore Asset go up and down completely randomly.

Pair Corralation between Citigroup and Ashmore Asset

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.89 times more return on investment than Ashmore Asset. However, Citigroup is 1.12 times less risky than Ashmore Asset. It trades about 0.01 of its potential returns per unit of risk. Ashmore Asset Management is currently generating about -0.21 per unit of risk. If you would invest  6,991  in Citigroup on December 30, 2024 and sell it today you would earn a total of  42.00  from holding Citigroup or generate 0.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.77%
Values	Daily Returns

Citigroup  vs.  Ashmore Asset Management

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.

Ashmore Asset Management

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ashmore Asset Management has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Citigroup and Ashmore Asset

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

The idea behind Citigroup and Ashmore Asset Management 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.