Correlation Between Citigroup and American Creek
Can any of the company-specific risk be diversified away by investing in both Citigroup and American Creek 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 American Creek into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and American Creek Resources, you can compare the effects of market volatilities on Citigroup and American Creek 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 American Creek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and American Creek.
Diversification Opportunities for Citigroup and American Creek
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citigroup and American is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and American Creek Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Creek Resources 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 American Creek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Creek Resources has no effect on the direction of Citigroup i.e., Citigroup and American Creek go up and down completely randomly.
Pair Corralation between Citigroup and American Creek
Taking into account the 90-day investment horizon Citigroup is expected to generate 3.03 times less return on investment than American Creek. But when comparing it to its historical volatility, Citigroup is 4.12 times less risky than American Creek. It trades about 0.07 of its potential returns per unit of risk. American Creek Resources is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 10.00 in American Creek Resources on August 29, 2024 and sell it today you would earn a total of 13.00 from holding American Creek Resources or generate 130.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. American Creek Resources
Performance |
| Timeline |
| Citigroup |
| American Creek Resources |
Citigroup and American Creek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and American Creek
The main advantage of trading using opposite Citigroup and American Creek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, American Creek 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 American Creek will offset losses from the drop in American Creek's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| American Creek vs. Gold79 Mines | American Creek vs. Arctic Star Exploration | American Creek vs. American Clean Resources | American Creek vs. Arras Minerals Corp |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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