Correlation Between Citigroup and African Rainbow
Can any of the company-specific risk be diversified away by investing in both Citigroup and African Rainbow 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 African Rainbow into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and African Rainbow Minerals, you can compare the effects of market volatilities on Citigroup and African Rainbow 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 African Rainbow. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and African Rainbow.
Diversification Opportunities for Citigroup and African Rainbow
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citigroup and African is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and African Rainbow Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on African Rainbow Minerals 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 African Rainbow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of African Rainbow Minerals has no effect on the direction of Citigroup i.e., Citigroup and African Rainbow go up and down completely randomly.
Pair Corralation between Citigroup and African Rainbow
If you would invest 6,360 in Citigroup on August 29, 2024 and sell it today you would earn a total of 656.00 from holding Citigroup or generate 10.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
Citigroup vs. African Rainbow Minerals
Performance |
| Timeline |
| Citigroup |
| African Rainbow Minerals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Citigroup and African Rainbow Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and African Rainbow
The main advantage of trading using opposite Citigroup and African Rainbow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, African Rainbow 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 African Rainbow will offset losses from the drop in African Rainbow's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| African Rainbow vs. Ivanhoe Mines | African Rainbow vs. Glencore PLC | African Rainbow vs. Asia Broadband | African Rainbow vs. Rio Tinto 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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