Correlation Between Citigroup and Amanet Management

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Can any of the company-specific risk be diversified away by investing in both Citigroup and Amanet Management 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 Amanet Management into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Amanet Management Systems, you can compare the effects of market volatilities on Citigroup and Amanet Management 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 Amanet Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Amanet Management.

Diversification Opportunities for Citigroup and Amanet Management

CitigroupAmanetDiversified AwayCitigroupAmanetDiversified Away100%
0.66
  Correlation Coefficient

Poor diversification

The 3 months correlation between Citigroup and Amanet is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Amanet Management Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amanet Management Systems 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 Amanet Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amanet Management Systems has no effect on the direction of Citigroup i.e., Citigroup and Amanet Management go up and down completely randomly.

Pair Corralation between Citigroup and Amanet Management

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.2 times more return on investment than Amanet Management. However, Citigroup is 1.2 times more volatile than Amanet Management Systems. It trades about 0.18 of its potential returns per unit of risk. Amanet Management Systems is currently generating about 0.06 per unit of risk. If you would invest  5,788  in Citigroup on September 15, 2024 and sell it today you would earn a total of  1,313  from holding Citigroup or generate 22.68% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy73.44%
ValuesDaily Returns

Citigroup  vs.  Amanet Management Systems

 Performance 
JavaScript chart by amCharts 3.21.15OctNov 0510152025
JavaScript chart by amCharts 3.21.15C AMAN
       Timeline  
Citigroup 

Risk-Adjusted Performance

13 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 13 (%) 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.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec6062646668707274
Amanet Management Systems 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Amanet Management Systems are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Amanet Management is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15SepOctNovDecOctNovDec1,5001,5201,5401,5601,5801,6001,6201,640

Citigroup and Amanet Management Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-5.7-4.27-2.84-1.410.02381.523.14.676.257.82 0.050.100.15
JavaScript chart by amCharts 3.21.15C AMAN
       Returns  

Pair Trading with Citigroup and Amanet Management

The main advantage of trading using opposite Citigroup and Amanet Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Amanet Management 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 Amanet Management will offset losses from the drop in Amanet Management's long position.
The idea behind Citigroup and Amanet Management Systems 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.

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