Correlation Between Citigroup and TRISTAR GOLD
Can any of the company-specific risk be diversified away by investing in both Citigroup and TRISTAR GOLD 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 TRISTAR GOLD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and TRISTAR GOLD, you can compare the effects of market volatilities on Citigroup and TRISTAR GOLD 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 TRISTAR GOLD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and TRISTAR GOLD.
Diversification Opportunities for Citigroup and TRISTAR GOLD
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citigroup and TRISTAR is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and TRISTAR GOLD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRISTAR GOLD 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 TRISTAR GOLD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRISTAR GOLD has no effect on the direction of Citigroup i.e., Citigroup and TRISTAR GOLD go up and down completely randomly.
Pair Corralation between Citigroup and TRISTAR GOLD
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.07 times less return on investment than TRISTAR GOLD. But when comparing it to its historical volatility, Citigroup is 3.57 times less risky than TRISTAR GOLD. It trades about 0.41 of its potential returns per unit of risk. TRISTAR GOLD is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 7.35 in TRISTAR GOLD on October 24, 2024 and sell it today you would earn a total of 2.00 from holding TRISTAR GOLD or generate 27.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Citigroup vs. TRISTAR GOLD
Performance |
| Timeline |
| Citigroup |
| TRISTAR GOLD |
Citigroup and TRISTAR GOLD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and TRISTAR GOLD
The main advantage of trading using opposite Citigroup and TRISTAR GOLD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, TRISTAR GOLD 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 TRISTAR GOLD will offset losses from the drop in TRISTAR GOLD's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| TRISTAR GOLD vs. PT Wintermar Offshore | TRISTAR GOLD vs. AGNC INVESTMENT | TRISTAR GOLD vs. Apollo Investment Corp | TRISTAR GOLD vs. United Rentals |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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