Correlation Between Atai Life and Citigroup

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

Diversification Opportunities for Atai Life and Citigroup

0.67
  Correlation Coefficient

Poor diversification

The 3 months correlation between Atai Life and Citigroup is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Atai Life Sciences and Citigroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citigroup and Atai Life 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 Atai Life Sciences 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 Atai Life i.e., Atai Life and Citigroup go up and down completely randomly.

Pair Corralation between Atai Life and Citigroup

Given the investment horizon of 90 days Atai Life Sciences is expected to under-perform the Citigroup. In addition to that, Atai Life is 2.18 times more volatile than Citigroup. It trades about -0.3 of its total potential returns per unit of risk. Citigroup is currently generating about -0.42 per unit of volatility. If you would invest  4,822  in Citigroup on July 5, 2022 and sell it today you would lose (655.00)  from holding Citigroup or give up 13.58% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Atai Life Sciences  vs.  Citigroup

 Performance (%) 
       Timeline  
Atai Life Sciences 
Atai Life Performance
0 of 100
Over the last 90 days Atai Life Sciences has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Atai Life is not utilizing all of its potentials. The new stock price disturbance, may contribute to mid-run losses for the stockholders.

Atai Life Price Channel

Citigroup 
Citigroup Performance
0 of 100
Over the last 90 days Citigroup has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Citigroup Price Channel

Atai Life and Citigroup Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Atai Life and Citigroup

The main advantage of trading using opposite Atai Life and Citigroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atai Life 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.
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The idea behind Atai Life Sciences and Citigroup 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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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.

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