Correlation Between Citigroup and SilverCrest Metals
Can any of the company-specific risk be diversified away by investing in both Citigroup and SilverCrest Metals 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 SilverCrest Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and SilverCrest Metals, you can compare the effects of market volatilities on Citigroup and SilverCrest Metals 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 SilverCrest Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and SilverCrest Metals.
Diversification Opportunities for Citigroup and SilverCrest Metals
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and SilverCrest is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and SilverCrest Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SilverCrest Metals 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 SilverCrest Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SilverCrest Metals has no effect on the direction of Citigroup i.e., Citigroup and SilverCrest Metals go up and down completely randomly.
Pair Corralation between Citigroup and SilverCrest Metals
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.73 times less return on investment than SilverCrest Metals. But when comparing it to its historical volatility, Citigroup is 2.63 times less risky than SilverCrest Metals. It trades about 0.11 of its potential returns per unit of risk. SilverCrest Metals is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 853.00 in SilverCrest Metals on September 4, 2024 and sell it today you would earn a total of 542.00 from holding SilverCrest Metals or generate 63.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 47.37% |
| Values | Daily Returns |
Citigroup vs. SilverCrest Metals
Performance |
| Timeline |
| Citigroup |
| SilverCrest Metals |
Citigroup and SilverCrest Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and SilverCrest Metals
The main advantage of trading using opposite Citigroup and SilverCrest Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, SilverCrest Metals 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 SilverCrest Metals will offset losses from the drop in SilverCrest Metals' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| SilverCrest Metals vs. Gamma Communications PLC | SilverCrest Metals vs. MTI Wireless Edge | SilverCrest Metals vs. Zegona Communications Plc | SilverCrest Metals vs. Alaska Air Group |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |