Correlation Between Citigroup and Falcon Gold
Can any of the company-specific risk be diversified away by investing in both Citigroup and Falcon Gold 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 Falcon Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Falcon Gold Corp, you can compare the effects of market volatilities on Citigroup and Falcon Gold 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 Falcon Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Falcon Gold.
Diversification Opportunities for Citigroup and Falcon Gold
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Falcon is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Falcon Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Falcon Gold Corp 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 Falcon Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Falcon Gold Corp has no effect on the direction of Citigroup i.e., Citigroup and Falcon Gold go up and down completely randomly.
Pair Corralation between Citigroup and Falcon Gold
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.2 times more return on investment than Falcon Gold. However, Citigroup is 5.1 times less risky than Falcon Gold. It trades about 0.21 of its potential returns per unit of risk. Falcon Gold Corp is currently generating about -0.07 per unit of risk. If you would invest 6,360 in Citigroup on August 28, 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Falcon Gold Corp
Performance |
| Timeline |
| Citigroup |
| Falcon Gold Corp |
Citigroup and Falcon Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Falcon Gold
The main advantage of trading using opposite Citigroup and Falcon Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Falcon Gold 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 Falcon Gold will offset losses from the drop in Falcon Gold's long position.The idea behind Citigroup and Falcon Gold Corp 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.| Falcon Gold vs. Aurion Resources | Falcon Gold vs. Liberty Gold Corp | Falcon Gold vs. Orezone Gold Corp | Falcon Gold vs. Fortuna Silver Mines |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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