Correlation Between Citigroup and Aetherium Acquisition

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

Diversification Opportunities for Citigroup and Aetherium Acquisition

0.6
  Correlation Coefficient

Poor diversification

The 3 months correlation between Citigroup and Aetherium is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Aetherium Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aetherium Acquisition 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 Aetherium Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aetherium Acquisition has no effect on the direction of Citigroup i.e., Citigroup and Aetherium Acquisition go up and down completely randomly.

Pair Corralation between Citigroup and Aetherium Acquisition

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.98 times more return on investment than Aetherium Acquisition. However, Citigroup is 1.02 times less risky than Aetherium Acquisition. It trades about 0.1 of its potential returns per unit of risk. Aetherium Acquisition Corp is currently generating about 0.02 per unit of risk. If you would invest  5,073  in Citigroup on September 8, 2024 and sell it today you would earn a total of  2,142  from holding Citigroup or generate 42.22% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy48.91%
ValuesDaily Returns

Citigroup  vs.  Aetherium Acquisition Corp

 Performance 
       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.
Aetherium Acquisition 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Aetherium Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward indicators, Aetherium Acquisition is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Citigroup and Aetherium Acquisition Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Citigroup and Aetherium Acquisition

The main advantage of trading using opposite Citigroup and Aetherium Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Aetherium Acquisition 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 Aetherium Acquisition will offset losses from the drop in Aetherium Acquisition's long position.
The idea behind Citigroup and Aetherium Acquisition Corp 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.
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.

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