Correlation Between Citigroup and Ave Maria
Can any of the company-specific risk be diversified away by investing in both Citigroup and Ave Maria 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 Ave Maria into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Ave Maria Bond, you can compare the effects of market volatilities on Citigroup and Ave Maria 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 Ave Maria. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Ave Maria.
Diversification Opportunities for Citigroup and Ave Maria
Almost no diversification
The 3 months correlation between Citigroup and Ave is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Ave Maria Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ave Maria Bond 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 Ave Maria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ave Maria Bond has no effect on the direction of Citigroup i.e., Citigroup and Ave Maria go up and down completely randomly.
Pair Corralation between Citigroup and Ave Maria
Taking into account the 90-day investment horizon Citigroup is expected to generate 5.29 times more return on investment than Ave Maria. However, Citigroup is 5.29 times more volatile than Ave Maria Bond. It trades about 0.12 of its potential returns per unit of risk. Ave Maria Bond is currently generating about 0.08 per unit of risk. If you would invest 4,583 in Citigroup on January 24, 2024 and sell it today you would earn a total of 1,512 from holding Citigroup or generate 32.99% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Citigroup vs. Ave Maria Bond
Performance |
Timeline |
Citigroup |
Ave Maria Bond |
Citigroup and Ave Maria Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Citigroup and Ave Maria
The main advantage of trading using opposite Citigroup and Ave Maria positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Ave Maria 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 Ave Maria will offset losses from the drop in Ave Maria's long position.Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
Ave Maria vs. Ave Maria Growth | Ave Maria vs. Ave Maria Rising | Ave Maria vs. Ave Maria Focused | Ave Maria vs. Ave Maria World |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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