Correlation Between Citigroup and Ancorathelen Small

Can any of the company-specific risk be diversified away by investing in both Citigroup and Ancorathelen Small 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 Ancorathelen Small into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Citigroup and Ancorathelen Small Mid Cap, you can compare the effects of market volatilities on Citigroup and Ancorathelen Small 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 Ancorathelen Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Ancorathelen Small.

Diversification Opportunities for Citigroup and Ancorathelen Small

0.72

Correlation Coefficient

Citigroup  Ancorathelen Small

Poor diversification

The 3 months correlation between Citigroup and Ancorathelen is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Ancorathelen Small Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ancorathelen Small Mid 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 Ancorathelen Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ancorathelen Small Mid has no effect on the direction of Citigroup i.e., Citigroup and Ancorathelen Small go up and down completely randomly.

Pair Corralation between Citigroup and Ancorathelen Small

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.01 times less return on investment than Ancorathelen Small. In addition to that, Citigroup is 1.7 times more volatile than Ancorathelen Small Mid Cap. It trades about 0.21 of its total potential returns per unit of risk. Ancorathelen Small Mid Cap is currently generating about 0.37 per unit of volatility. If you would invest  2,057  in Ancorathelen Small Mid Cap on August 31, 2024 and sell it today you would earn a total of  210.00  from holding Ancorathelen Small Mid Cap or generate 10.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Citigroup  vs.  Ancorathelen Small Mid Cap

Citigroup

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

Ancorathelen Small Mid

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ancorathelen Small Mid Cap are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Ancorathelen Small showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and Ancorathelen Small

The main advantage of trading using opposite Citigroup and Ancorathelen Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Ancorathelen Small 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 Ancorathelen Small will offset losses from the drop in Ancorathelen Small's long position.

The idea behind Citigroup and Ancorathelen Small Mid Cap pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.