Correlation Between American National and Citigroup
Can any of the company-specific risk be diversified away by investing in both American National and Citigroup 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 American National and Citigroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American National Bankshares and Citigroup, you can compare the effects of market volatilities on American National and Citigroup 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 American National with a short position of Citigroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of American National and Citigroup.
Diversification Opportunities for American National and Citigroup
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and Citigroup is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding American National Bankshares and Citigroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citigroup and American National 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 American National Bankshares are associated (or correlated) with Citigroup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citigroup has no effect on the direction of American National i.e., American National and Citigroup go up and down completely randomly.
Pair Corralation between American National and Citigroup
Given the investment horizon of 90 days American National Bankshares is expected to generate 1.87 times more return on investment than Citigroup. However, American National is 1.87 times more volatile than Citigroup. It trades about 0.12 of its potential returns per unit of risk. Citigroup is currently generating about 0.11 per unit of risk. If you would invest 2,791 in American National Bankshares on January 24, 2024 and sell it today you would earn a total of 1,985 from holding American National Bankshares or generate 71.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 92.72% |
| Values | Daily Returns |
American National Bankshares vs. Citigroup
Performance |
| Timeline |
| American National |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
| Citigroup |
American National and Citigroup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American National and Citigroup
The main advantage of trading using opposite American National and Citigroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American National position performs unexpectedly, Citigroup 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 Citigroup will offset losses from the drop in Citigroup's long position.| American National vs. HMN Financial | American National vs. First Northwest Bancorp | American National vs. Community West Bancshares | American National vs. First Financial Northwest |
| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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