Correlation Between Citigroup and Aim International

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

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

Diversification Opportunities for Citigroup and Aim International

-0.07

Correlation Coefficient

Citigroup  Aim International

Good diversification

The 3 months correlation between Citigroup and Aim is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Aim International Mutual in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aim International Mutual 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 Aim International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aim International Mutual has no effect on the direction of Citigroup i.e., Citigroup and Aim International go up and down completely randomly.

Pair Corralation between Citigroup and Aim International

Taking into account the 90-day investment horizon Citigroup is expected to under-perform the Aim International. In addition to that, Citigroup is 3.08 times more volatile than Aim International Mutual. It trades about -0.2 of its total potential returns per unit of risk. Aim International Mutual is currently generating about 0.03 per unit of volatility. If you would invest  3,821  in Aim International Mutual on December 5, 2024 and sell it today you would earn a total of  18.00  from holding Aim International Mutual or generate 0.47% return on investment over 90 days.

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

Citigroup  vs.  Aim International Mutual

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 recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Aim International Mutual

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aim International Mutual has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's essential indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Citigroup and Aim International

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

The idea behind Citigroup and Aim International Mutual 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.

Check out your portfolio center.

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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.