Correlation Between Citigroup and Aston/river Road

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

By analyzing existing cross correlation between Citigroup and Astonriver Road Independent, you can compare the effects of market volatilities on Citigroup and Aston/river Road 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 Aston/river Road. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Aston/river Road.

Diversification Opportunities for Citigroup and Aston/river Road

-0.74

Correlation Coefficient

Citigroup  Aston/river Road

Pay attention - limited upside

The 3 months correlation between Citigroup and Aston/river is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Astonriver Road Independent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astonriver Road Inde 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 Aston/river Road. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astonriver Road Inde has no effect on the direction of Citigroup i.e., Citigroup and Aston/river Road go up and down completely randomly.

Pair Corralation between Citigroup and Aston/river Road

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.13 times more return on investment than Aston/river Road. However, Citigroup is 1.13 times more volatile than Astonriver Road Independent. It trades about -0.05 of its potential returns per unit of risk. Astonriver Road Independent is currently generating about -0.18 per unit of risk. If you would invest  7,139  in Citigroup on October 3, 2024 and sell it today you would lose (100.00) from holding Citigroup or give up 1.4% of portfolio value over 90 days.

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

Citigroup  vs.  Astonriver Road Independent

Citigroup

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

Astonriver Road Inde

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Astonriver Road Independent 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 forward 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 Aston/river Road

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

The idea behind Citigroup and Astonriver Road Independent 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.