Correlation Between Citigroup and FPX Nickel
Can any of the company-specific risk be diversified away by investing in both Citigroup and FPX 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 FPX Nickel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and FPX Nickel Corp, you can compare the effects of market volatilities on Citigroup and FPX 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 FPX Nickel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and FPX Nickel.
Diversification Opportunities for Citigroup and FPX Nickel
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and FPX is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and FPX Nickel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FPX Nickel 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 FPX Nickel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FPX Nickel Corp has no effect on the direction of Citigroup i.e., Citigroup and FPX Nickel go up and down completely randomly.
Pair Corralation between Citigroup and FPX Nickel
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.49 times more return on investment than FPX Nickel. However, Citigroup is 2.02 times less risky than FPX Nickel. It trades about 0.21 of its potential returns per unit of risk. FPX Nickel Corp is currently generating about -0.1 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 | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Citigroup vs. FPX Nickel Corp
Performance |
| Timeline |
| Citigroup |
| FPX Nickel Corp |
Citigroup and FPX Nickel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and FPX Nickel
The main advantage of trading using opposite Citigroup and FPX Nickel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, FPX 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 FPX Nickel will offset losses from the drop in FPX Nickel's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| FPX Nickel vs. Oroco Resource Corp | FPX Nickel vs. Syrah Resources Limited | FPX Nickel vs. Graphite One | FPX Nickel vs. Westwater Resources |
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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