Correlation Between Citigroup and Aris Gold
Can any of the company-specific risk be diversified away by investing in both Citigroup and Aris 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 Aris Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Aris Gold Corp, you can compare the effects of market volatilities on Citigroup and Aris 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 Aris Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Aris Gold.
Diversification Opportunities for Citigroup and Aris Gold
Excellent diversification
The 3 months correlation between Citigroup and Aris is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Aris Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aris Gold 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 Aris Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aris Gold Corp has no effect on the direction of Citigroup i.e., Citigroup and Aris Gold go up and down completely randomly.
Pair Corralation between Citigroup and Aris Gold
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.25 times less return on investment than Aris Gold. But when comparing it to its historical volatility, Citigroup is 1.82 times less risky than Aris Gold. It trades about 0.08 of its potential returns per unit of risk. Aris Gold Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 338.00 in Aris Gold Corp on August 31, 2024 and sell it today you would earn a total of 201.00 from holding Aris Gold Corp or generate 59.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Citigroup vs. Aris Gold Corp
Performance |
| Timeline |
| Citigroup |
| Aris Gold Corp |
Citigroup and Aris Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Aris Gold
The main advantage of trading using opposite Citigroup and Aris Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Aris 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 Aris Gold will offset losses from the drop in Aris Gold's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Aris Gold vs. Calibre Mining Corp | Aris Gold vs. K92 Mining | Aris Gold vs. Equinox Gold Corp | Aris Gold vs. New Found Gold |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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