Correlation Between Citigroup and ADVANCED ANALOGIC

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

Diversification Opportunities for Citigroup and ADVANCED ANALOGIC

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Citigroup and ADVANCED is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and ADVANCED ANALOGIC TECHNOLOGIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADVANCED ANALOGIC 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 ADVANCED ANALOGIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADVANCED ANALOGIC has no effect on the direction of Citigroup i.e., Citigroup and ADVANCED ANALOGIC go up and down completely randomly.

Pair Corralation between Citigroup and ADVANCED ANALOGIC

If you would invest  4,749  in Citigroup on May 19, 2022 and sell it today you would earn a total of  615.00  from holding Citigroup or generate 12.95% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Citigroup  vs.  ADVANCED ANALOGIC TECHNOLOGIES

 Performance (%) 
       Timeline  
Citigroup 
Citigroup Performance
5 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile fundamental indicators, Citigroup may actually be approaching a critical reversion point that can send shares even higher in September 2022.

Citigroup Price Channel

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

Citigroup and ADVANCED ANALOGIC Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Citigroup and ADVANCED ANALOGIC

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

ADVANCED ANALOGIC TECHNOLOGIES

Pair trading matchups for ADVANCED ANALOGIC

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 Price Transformation module to use Price Transformation models to analyze depth of different equity instruments across global markets.

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