Correlation Between Aerodrome and Citigroup

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Aerodrome 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 Aerodrome and Citigroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aerodrome Group and Citigroup, you can compare the effects of market volatilities on Aerodrome 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 Aerodrome with a short position of Citigroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aerodrome and Citigroup.

Diversification Opportunities for Aerodrome and Citigroup

0.47
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Aerodrome and Citigroup is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Aerodrome Group and Citigroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citigroup and Aerodrome 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 Aerodrome Group 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 Aerodrome i.e., Aerodrome and Citigroup go up and down completely randomly.

Pair Corralation between Aerodrome and Citigroup

Assuming the 90 days trading horizon Aerodrome Group is expected to generate 5.21 times more return on investment than Citigroup. However, Aerodrome is 5.21 times more volatile than Citigroup. It trades about 0.27 of its potential returns per unit of risk. Citigroup is currently generating about 0.71 per unit of risk. If you would invest  6,000  in Aerodrome Group on December 30, 2023 and sell it today you would earn a total of  1,410  from holding Aerodrome Group or generate 23.5% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy81.82%
ValuesDaily Returns

Aerodrome Group  vs.  Citigroup

 Performance 
       Timeline  
Aerodrome Group 

Risk-Adjusted Performance

6 of 100

 
Low
 
High
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Aerodrome Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Aerodrome sustained solid returns over the last few months and may actually be approaching a breakup point.
Citigroup 

Risk-Adjusted Performance

18 of 100

 
Low
 
High
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

Aerodrome and Citigroup Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Aerodrome and Citigroup

The main advantage of trading using opposite Aerodrome and Citigroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aerodrome 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.
The idea behind Aerodrome Group and Citigroup 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.

Other Complementary Tools

Volatility Analysis
Get historical volatility and risk analysis based on latest market data
Portfolio Anywhere
Track or share privately all of your investments from the convenience of any device
Commodity Directory
Find actively traded commodities issued by global exchanges
Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators
Price Exposure Probability
Analyze equity upside and downside potential for a given time horizon across multiple markets