Correlation Between Citigroup and Canada Nickel
Can any of the company-specific risk be diversified away by investing in both Citigroup and Canada Nickel 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 Canada Nickel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Canada Nickel, you can compare the effects of market volatilities on Citigroup and Canada Nickel 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 Canada Nickel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Canada Nickel.
Diversification Opportunities for Citigroup and Canada Nickel
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and Canada is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Canada Nickel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canada Nickel 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 Canada Nickel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canada Nickel has no effect on the direction of Citigroup i.e., Citigroup and Canada Nickel go up and down completely randomly.
Pair Corralation between Citigroup and Canada Nickel
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.78 times more return on investment than Canada Nickel. However, Citigroup is 1.28 times less risky than Canada Nickel. It trades about 0.21 of its potential returns per unit of risk. Canada Nickel is currently generating about -0.13 per unit of risk. 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Canada Nickel
Performance |
| Timeline |
| Citigroup |
| Canada Nickel |
Citigroup and Canada Nickel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Canada Nickel
The main advantage of trading using opposite Citigroup and Canada Nickel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Canada Nickel 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 Canada Nickel will offset losses from the drop in Canada Nickel's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Canada Nickel vs. Nobel Resources Corp | Canada Nickel vs. Juggernaut Exploration | Canada Nickel vs. SPC Nickel Corp | Canada Nickel vs. Lotus Resources Limited |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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