Correlation Between Citigroup and Black Dragon
Can any of the company-specific risk be diversified away by investing in both Citigroup and Black Dragon 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 Black Dragon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Black Dragon Resource, you can compare the effects of market volatilities on Citigroup and Black Dragon 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 Black Dragon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Black Dragon.
Diversification Opportunities for Citigroup and Black Dragon
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and Black is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Black Dragon Resource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Black Dragon Resource 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 Black Dragon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Black Dragon Resource has no effect on the direction of Citigroup i.e., Citigroup and Black Dragon go up and down completely randomly.
Pair Corralation between Citigroup and Black Dragon
If you would invest 6,393 in Citigroup on August 31, 2024 and sell it today you would earn a total of 694.00 from holding Citigroup or generate 10.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Citigroup vs. Black Dragon Resource
Performance |
| Timeline |
| Citigroup |
| Black Dragon Resource |
Citigroup and Black Dragon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Black Dragon
The main advantage of trading using opposite Citigroup and Black Dragon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Black Dragon 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 Black Dragon will offset losses from the drop in Black Dragon's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Black Dragon vs. Permian Resources | Black Dragon vs. Devon Energy | Black Dragon vs. EOG Resources | Black Dragon vs. Coterra Energy |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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