Correlation Between Citigroup and Alexandria Real
Can any of the company-specific risk be diversified away by investing in both Citigroup and Alexandria Real 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 Alexandria Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Alexandria Real Estate, you can compare the effects of market volatilities on Citigroup and Alexandria Real 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 Alexandria Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Alexandria Real.
Diversification Opportunities for Citigroup and Alexandria Real
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citigroup and Alexandria is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Alexandria Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alexandria Real Estate 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 Alexandria Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alexandria Real Estate has no effect on the direction of Citigroup i.e., Citigroup and Alexandria Real go up and down completely randomly.
Pair Corralation between Citigroup and Alexandria Real
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.8 times more return on investment than Alexandria Real. However, Citigroup is 1.24 times less risky than Alexandria Real. It trades about 0.08 of its potential returns per unit of risk. Alexandria Real Estate is currently generating about -0.09 per unit of risk. If you would invest 6,095 in Citigroup on January 25, 2024 and sell it today you would earn a total of 152.00 from holding Citigroup or generate 2.49% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Citigroup vs. Alexandria Real Estate
Performance |
Timeline |
Citigroup |
Alexandria Real Estate |
Citigroup and Alexandria Real Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Citigroup and Alexandria Real
The main advantage of trading using opposite Citigroup and Alexandria Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Alexandria Real 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 Alexandria Real will offset losses from the drop in Alexandria Real's long position.Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
Alexandria Real vs. Equity Commonwealth | Alexandria Real vs. Piedmont Office Realty | Alexandria Real vs. Hudson Pacific Properties |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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