Correlation Between Citigroup and Black Tusk
Can any of the company-specific risk be diversified away by investing in both Citigroup and Black Tusk 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 Tusk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Black Tusk Resources, you can compare the effects of market volatilities on Citigroup and Black Tusk 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 Tusk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Black Tusk.
Diversification Opportunities for Citigroup and Black Tusk
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Citigroup and Black is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Black Tusk Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Black Tusk Resources 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 Tusk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Black Tusk Resources has no effect on the direction of Citigroup i.e., Citigroup and Black Tusk go up and down completely randomly.
Pair Corralation between Citigroup and Black Tusk
If you would invest 6,360 in Citigroup on August 29, 2024 and sell it today you would earn a total of 615.00 from holding Citigroup or generate 9.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Citigroup vs. Black Tusk Resources
Performance |
| Timeline |
| Citigroup |
| Black Tusk Resources |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Strong
Citigroup and Black Tusk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Black Tusk
The main advantage of trading using opposite Citigroup and Black Tusk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Black Tusk 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 Tusk will offset losses from the drop in Black Tusk's long position.The idea behind Citigroup and Black Tusk Resources pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Black Tusk vs. Palamina Corp | Black Tusk vs. Gold Springs Resource | Black Tusk vs. BTU Metals Corp | Black Tusk vs. Norsemont Mining |
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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