Correlation Between Citigroup and Alignment Healthcare
Can any of the company-specific risk be diversified away by investing in both Citigroup and Alignment Healthcare 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 Alignment Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Alignment Healthcare LLC, you can compare the effects of market volatilities on Citigroup and Alignment Healthcare 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 Alignment Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Alignment Healthcare.
Diversification Opportunities for Citigroup and Alignment Healthcare
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and Alignment is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Alignment Healthcare LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alignment Healthcare LLC 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 Alignment Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alignment Healthcare LLC has no effect on the direction of Citigroup i.e., Citigroup and Alignment Healthcare go up and down completely randomly.
Pair Corralation between Citigroup and Alignment Healthcare
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.1 times less return on investment than Alignment Healthcare. But when comparing it to its historical volatility, Citigroup is 1.74 times less risky than Alignment Healthcare. It trades about 0.08 of its potential returns per unit of risk. Alignment Healthcare LLC is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 893.00 in Alignment Healthcare LLC on April 22, 2025 and sell it today you would earn a total of 348.00 from holding Alignment Healthcare LLC or generate 38.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Alignment Healthcare LLC
Performance |
| Timeline |
| Citigroup |
| Alignment Healthcare LLC |
Citigroup and Alignment Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Alignment Healthcare
The main advantage of trading using opposite Citigroup and Alignment Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Alignment Healthcare 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 Alignment Healthcare will offset losses from the drop in Alignment Healthcare's long position.The idea behind Citigroup and Alignment Healthcare LLC 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.| Alignment Healthcare vs. Oscar Health | Alignment Healthcare vs. Molina Healthcare | Alignment Healthcare vs. Centene Corp | Alignment Healthcare vs. NeueHealth |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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