Correlation Between Citigroup and China Molybdenum
Can any of the company-specific risk be diversified away by investing in both Citigroup and China Molybdenum 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 China Molybdenum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and China Molybdenum Co, you can compare the effects of market volatilities on Citigroup and China Molybdenum 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 China Molybdenum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and China Molybdenum.
Diversification Opportunities for Citigroup and China Molybdenum
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Citigroup and China is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and China Molybdenum Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Molybdenum 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 China Molybdenum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Molybdenum has no effect on the direction of Citigroup i.e., Citigroup and China Molybdenum go up and down completely randomly.
Pair Corralation between Citigroup and China Molybdenum
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.47 times more return on investment than China Molybdenum. However, Citigroup is 2.12 times less risky than China Molybdenum. It trades about 0.32 of its potential returns per unit of risk. China Molybdenum Co is currently generating about -0.2 per unit of risk. If you would invest 6,235 in Citigroup on September 3, 2024 and sell it today you would earn a total of 852.00 from holding Citigroup or generate 13.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. China Molybdenum Co
Performance |
| Timeline |
| Citigroup |
| China Molybdenum |
Citigroup and China Molybdenum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and China Molybdenum
The main advantage of trading using opposite Citigroup and China Molybdenum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, China Molybdenum 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 China Molybdenum will offset losses from the drop in China Molybdenum's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| China Molybdenum vs. Ardea Resources Limited | China Molybdenum vs. Centaurus Metals Limited | China Molybdenum vs. Canada Silver Cobalt | China Molybdenum vs. Blackstone Minerals |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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