Correlation Between Citigroup and Chilwa Minerals
Can any of the company-specific risk be diversified away by investing in both Citigroup and Chilwa Minerals 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 Chilwa Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Chilwa Minerals Limited, you can compare the effects of market volatilities on Citigroup and Chilwa Minerals 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 Chilwa Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Chilwa Minerals.
Diversification Opportunities for Citigroup and Chilwa Minerals
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Citigroup and Chilwa is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Chilwa Minerals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chilwa Minerals 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 Chilwa Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chilwa Minerals has no effect on the direction of Citigroup i.e., Citigroup and Chilwa Minerals go up and down completely randomly.
Pair Corralation between Citigroup and Chilwa Minerals
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.69 times more return on investment than Chilwa Minerals. However, Citigroup is 1.44 times less risky than Chilwa Minerals. It trades about 0.32 of its potential returns per unit of risk. Chilwa Minerals Limited is currently generating about -0.02 per unit of risk. If you would invest 6,235 in Citigroup on September 5, 2024 and sell it today you would earn a total of 915.00 from holding Citigroup or generate 14.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Citigroup vs. Chilwa Minerals Limited
Performance |
| Timeline |
| Citigroup |
| Chilwa Minerals |
Citigroup and Chilwa Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Chilwa Minerals
The main advantage of trading using opposite Citigroup and Chilwa Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Chilwa Minerals 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 Chilwa Minerals will offset losses from the drop in Chilwa Minerals' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Chilwa Minerals vs. Northern Star Resources | Chilwa Minerals vs. Evolution Mining | Chilwa Minerals vs. Bluescope Steel | Chilwa Minerals vs. Sandfire Resources NL |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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