Correlation Between Citigroup and Australian Strategic
Can any of the company-specific risk be diversified away by investing in both Citigroup and Australian Strategic 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 Australian Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Australian Strategic Materials, you can compare the effects of market volatilities on Citigroup and Australian Strategic 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 Australian Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Australian Strategic.
Diversification Opportunities for Citigroup and Australian Strategic
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Citigroup and Australian is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Australian Strategic Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Australian Strategic 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 Australian Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Australian Strategic has no effect on the direction of Citigroup i.e., Citigroup and Australian Strategic go up and down completely randomly.
Pair Corralation between Citigroup and Australian Strategic
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.53 times more return on investment than Australian Strategic. However, Citigroup is 1.87 times less risky than Australian Strategic. It trades about 0.16 of its potential returns per unit of risk. Australian Strategic Materials is currently generating about -0.03 per unit of risk. If you would invest 6,083 in Citigroup on August 25, 2024 and sell it today you would earn a total of 901.00 from holding Citigroup or generate 14.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Australian Strategic Materials
Performance |
| Timeline |
| Citigroup |
| Australian Strategic |
Citigroup and Australian Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Australian Strategic
The main advantage of trading using opposite Citigroup and Australian Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Australian Strategic 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 Australian Strategic will offset losses from the drop in Australian Strategic's long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
| Australian Strategic vs. Norra Metals Corp | Australian Strategic vs. ZincX Resources Corp | Australian Strategic vs. Nuinsco Resources Limited | Australian Strategic vs. South Star Battery |
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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