Correlation Between Citigroup and Falco Resources
Can any of the company-specific risk be diversified away by investing in both Citigroup and Falco Resources 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 Falco Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Falco Resources, you can compare the effects of market volatilities on Citigroup and Falco Resources 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 Falco Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Falco Resources.
Diversification Opportunities for Citigroup and Falco Resources
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Citigroup and Falco is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Falco Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Falco Resources 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 Falco Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Falco Resources has no effect on the direction of Citigroup i.e., Citigroup and Falco Resources go up and down completely randomly.
Pair Corralation between Citigroup and Falco Resources
Taking into account the 90-day investment horizon Citigroup is expected to generate 13.5 times less return on investment than Falco Resources. But when comparing it to its historical volatility, Citigroup is 24.61 times less risky than Falco Resources. It trades about 0.26 of its potential returns per unit of risk. Falco Resources is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 25.00 in Falco Resources on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Falco Resources or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Falco Resources
Performance |
| Timeline |
| Citigroup |
| Falco Resources |
Citigroup and Falco Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Falco Resources
The main advantage of trading using opposite Citigroup and Falco Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Falco Resources 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 Falco Resources will offset losses from the drop in Falco Resources' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Falco Resources vs. American Lithium Corp | Falco Resources vs. Ameriwest Lithium | Falco Resources vs. Alpha Lithium | Falco Resources vs. United Lithium Corp |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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