Correlation Between Citigroup and Arcellx
Can any of the company-specific risk be diversified away by investing in both Citigroup and Arcellx 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 Arcellx into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Arcellx, you can compare the effects of market volatilities on Citigroup and Arcellx 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 Arcellx. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Arcellx.
Diversification Opportunities for Citigroup and Arcellx
Weak diversification
The 3 months correlation between Citigroup and Arcellx is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Arcellx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arcellx 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 Arcellx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arcellx has no effect on the direction of Citigroup i.e., Citigroup and Arcellx go up and down completely randomly.
Pair Corralation between Citigroup and Arcellx
Taking into account the 90-day investment horizon Citigroup is expected to generate 3.81 times less return on investment than Arcellx. But when comparing it to its historical volatility, Citigroup is 2.2 times less risky than Arcellx. It trades about 0.06 of its potential returns per unit of risk. Arcellx is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,311 in Arcellx on July 23, 2024 and sell it today you would earn a total of 7,375 from holding Arcellx or generate 319.13% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Citigroup vs. Arcellx
Performance |
Timeline |
Citigroup |
Arcellx |
Citigroup and Arcellx Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Citigroup and Arcellx
The main advantage of trading using opposite Citigroup and Arcellx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Arcellx 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 Arcellx will offset losses from the drop in Arcellx's long position.Citigroup vs. Aquagold International | Citigroup vs. Thrivent High Yield | Citigroup vs. Morningstar Unconstrained Allocation | Citigroup vs. Via Renewables |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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