Correlation Between Citigroup and Adventus Mining
Can any of the company-specific risk be diversified away by investing in both Citigroup and Adventus Mining 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 Adventus Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Adventus Mining, you can compare the effects of market volatilities on Citigroup and Adventus Mining 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 Adventus Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Adventus Mining.
Diversification Opportunities for Citigroup and Adventus Mining
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and Adventus is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Adventus Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adventus Mining 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 Adventus Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adventus Mining has no effect on the direction of Citigroup i.e., Citigroup and Adventus Mining go up and down completely randomly.
Pair Corralation between Citigroup and Adventus Mining
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.35 times more return on investment than Adventus Mining. However, Citigroup is 2.88 times less risky than Adventus Mining. It trades about 0.07 of its potential returns per unit of risk. Adventus Mining is currently generating about 0.02 per unit of risk. If you would invest 4,118 in Citigroup on August 29, 2024 and sell it today you would earn a total of 2,857 from holding Citigroup or generate 69.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 84.24% |
| Values | Daily Returns |
Citigroup vs. Adventus Mining
Performance |
| Timeline |
| Citigroup |
| Adventus Mining |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Citigroup and Adventus Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Adventus Mining
The main advantage of trading using opposite Citigroup and Adventus Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Adventus Mining 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 Adventus Mining will offset losses from the drop in Adventus Mining's long position.The idea behind Citigroup and Adventus Mining 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.| Adventus Mining vs. Pan Global Resources | Adventus Mining vs. Eagle Plains Resources | Adventus Mining vs. Troilus Gold Corp | Adventus Mining vs. Boss Resources |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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