Correlation Between Citigroup and Agricultural Bank
Can any of the company-specific risk be diversified away by investing in both Citigroup and Agricultural Bank 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 Agricultural Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Agricultural Bank of, you can compare the effects of market volatilities on Citigroup and Agricultural Bank 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 Agricultural Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Agricultural Bank.
Diversification Opportunities for Citigroup and Agricultural Bank
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Agricultural is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Agricultural Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agricultural Bank 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 Agricultural Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agricultural Bank has no effect on the direction of Citigroup i.e., Citigroup and Agricultural Bank go up and down completely randomly.
Pair Corralation between Citigroup and Agricultural Bank
Taking into account the 90-day investment horizon Citigroup is expected to generate 4.59 times less return on investment than Agricultural Bank. In addition to that, Citigroup is 1.21 times more volatile than Agricultural Bank of. It trades about 0.05 of its total potential returns per unit of risk. Agricultural Bank of is currently generating about 0.25 per unit of volatility. If you would invest 1,045 in Agricultural Bank of on January 26, 2024 and sell it today you would earn a total of 80.00 from holding Agricultural Bank of or generate 7.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Citigroup vs. Agricultural Bank of
Performance |
| Timeline |
| Citigroup |
| Agricultural Bank |
Citigroup and Agricultural Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Agricultural Bank
The main advantage of trading using opposite Citigroup and Agricultural Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Agricultural Bank 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 Agricultural Bank will offset losses from the drop in Agricultural Bank's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Agricultural Bank vs. ANZ Group Holdings | Agricultural Bank vs. Bank of America | Agricultural Bank vs. Bank of America | Agricultural Bank vs. Wells Fargo |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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