Correlation Between MicroAlgo and Citigroup
Can any of the company-specific risk be diversified away by investing in both MicroAlgo 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 MicroAlgo and Citigroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MicroAlgo and Citigroup, you can compare the effects of market volatilities on MicroAlgo 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 MicroAlgo with a short position of Citigroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of MicroAlgo and Citigroup.
Diversification Opportunities for MicroAlgo and Citigroup
Modest diversification
The 3 months correlation between MicroAlgo and Citigroup is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding MicroAlgo and Citigroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citigroup and MicroAlgo 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 MicroAlgo 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 MicroAlgo i.e., MicroAlgo and Citigroup go up and down completely randomly.
Pair Corralation between MicroAlgo and Citigroup
Given the investment horizon of 90 days MicroAlgo is expected to generate 102.67 times more return on investment than Citigroup. However, MicroAlgo is 102.67 times more volatile than Citigroup. It trades about 0.16 of its potential returns per unit of risk. Citigroup is currently generating about 0.1 per unit of risk. If you would invest 58.00 in MicroAlgo on March 7, 2024 and sell it today you would earn a total of 1,143 from holding MicroAlgo or generate 1970.69% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
MicroAlgo vs. Citigroup
Performance |
Timeline |
MicroAlgo |
Citigroup |
MicroAlgo and Citigroup Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with MicroAlgo and Citigroup
The main advantage of trading using opposite MicroAlgo and Citigroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MicroAlgo 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.MicroAlgo vs. NetScout Systems | MicroAlgo vs. Consensus Cloud Solutions | MicroAlgo vs. CSG Systems International | MicroAlgo vs. Evertec |
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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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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