Correlation Between Citigroup and AGF AS
Can any of the company-specific risk be diversified away by investing in both Citigroup and AGF AS 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 AGF AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and AGF AS, you can compare the effects of market volatilities on Citigroup and AGF AS 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 AGF AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and AGF AS.
Diversification Opportunities for Citigroup and AGF AS
Very weak diversification
The 3 months correlation between Citigroup and AGF is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and AGF AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGF AS 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 AGF AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGF AS has no effect on the direction of Citigroup i.e., Citigroup and AGF AS go up and down completely randomly.
Pair Corralation between Citigroup and AGF AS
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.82 times more return on investment than AGF AS. However, Citigroup is 1.22 times less risky than AGF AS. It trades about 0.08 of its potential returns per unit of risk. AGF AS is currently generating about 0.02 per unit of risk. If you would invest 4,580 in Citigroup on January 20, 2024 and sell it today you would earn a total of 1,252 from holding Citigroup or generate 27.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. AGF AS
Performance |
| Timeline |
| Citigroup |
| AGF AS |
Citigroup and AGF AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and AGF AS
The main advantage of trading using opposite Citigroup and AGF AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, AGF AS 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 AGF AS will offset losses from the drop in AGF AS's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| AGF AS vs. Tivoli AS | AGF AS vs. PARKEN Sport Entertainment | AGF AS vs. Broendbyernes IF Fodbold | AGF AS vs. Silkeborg IF Invest |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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