Correlation Between Citigroup and Fine Metal
Can any of the company-specific risk be diversified away by investing in both Citigroup and Fine Metal 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 Fine Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Fine Metal Technologies, you can compare the effects of market volatilities on Citigroup and Fine Metal 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 Fine Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Fine Metal.
Diversification Opportunities for Citigroup and Fine Metal
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Fine is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Fine Metal Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fine Metal Technologies 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 Fine Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fine Metal Technologies has no effect on the direction of Citigroup i.e., Citigroup and Fine Metal go up and down completely randomly.
Pair Corralation between Citigroup and Fine Metal
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.09 times more return on investment than Fine Metal. However, Citigroup is 1.09 times more volatile than Fine Metal Technologies. It trades about 0.02 of its potential returns per unit of risk. Fine Metal Technologies is currently generating about -0.08 per unit of risk. If you would invest 6,106 in Citigroup on January 14, 2025 and sell it today you would earn a total of 283.00 from holding Citigroup or generate 4.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.79% |
| Values | Daily Returns |
Citigroup vs. Fine Metal Technologies
Performance |
| Timeline |
| Citigroup |
| Fine Metal Technologies |
Citigroup and Fine Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Fine Metal
The main advantage of trading using opposite Citigroup and Fine Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Fine Metal 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 Fine Metal will offset losses from the drop in Fine Metal's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. Bank of America |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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