Correlation Between Citigroup and Alphamin Resources
Can any of the company-specific risk be diversified away by investing in both Citigroup and Alphamin Resources 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 Alphamin Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Alphamin Resources Corp, you can compare the effects of market volatilities on Citigroup and Alphamin Resources 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 Alphamin Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Alphamin Resources.
Diversification Opportunities for Citigroup and Alphamin Resources
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Alphamin is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Alphamin Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alphamin Resources Corp 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 Alphamin Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alphamin Resources Corp has no effect on the direction of Citigroup i.e., Citigroup and Alphamin Resources go up and down completely randomly.
Pair Corralation between Citigroup and Alphamin Resources
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.22 times less return on investment than Alphamin Resources. But when comparing it to its historical volatility, Citigroup is 1.59 times less risky than Alphamin Resources. It trades about 0.09 of its potential returns per unit of risk. Alphamin Resources Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 64.00 in Alphamin Resources Corp on August 25, 2024 and sell it today you would earn a total of 20.00 from holding Alphamin Resources Corp or generate 31.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Alphamin Resources Corp
Performance |
| Timeline |
| Citigroup |
| Alphamin Resources Corp |
Citigroup and Alphamin Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Alphamin Resources
The main advantage of trading using opposite Citigroup and Alphamin Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Alphamin Resources 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 Alphamin Resources will offset losses from the drop in Alphamin Resources' long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
| Alphamin Resources vs. Ascendant Resources | Alphamin Resources vs. Cantex Mine Development | Alphamin Resources vs. Amarc Resources | Alphamin Resources vs. Sterling Metals 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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