Correlation Between Citigroup and ASTRA GRAPHIA

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

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

Diversification Opportunities for Citigroup and ASTRA GRAPHIA

-0.2

Correlation Coefficient

Citigroup  ASTRA GRAPHIA

Good diversification

The 3 months correlation between Citigroup and ASTRA is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and ASTRA GRAPHIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASTRA GRAPHIA 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 ASTRA GRAPHIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASTRA GRAPHIA has no effect on the direction of Citigroup i.e., Citigroup and ASTRA GRAPHIA go up and down completely randomly.

Pair Corralation between Citigroup and ASTRA GRAPHIA

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.16 times more return on investment than ASTRA GRAPHIA. However, Citigroup is 1.16 times more volatile than ASTRA GRAPHIA. It trades about 0.11 of its potential returns per unit of risk. ASTRA GRAPHIA is currently generating about -0.03 per unit of risk. If you would invest  6,516  in Citigroup on October 11, 2024 and sell it today you would earn a total of  810.00  from holding Citigroup or generate 12.43% return on investment over 90 days.

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

Citigroup  vs.  ASTRA GRAPHIA

Citigroup

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

ASTRA GRAPHIA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ASTRA GRAPHIA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, ASTRA GRAPHIA is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Citigroup and ASTRA GRAPHIA

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

The idea behind Citigroup and ASTRA GRAPHIA 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.