Correlation Between Citigroup and Greentech Metals
Can any of the company-specific risk be diversified away by investing in both Citigroup and Greentech Metals 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 Greentech Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Greentech Metals, you can compare the effects of market volatilities on Citigroup and Greentech Metals 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 Greentech Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Greentech Metals.
Diversification Opportunities for Citigroup and Greentech Metals
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Citigroup and Greentech is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Greentech Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greentech Metals 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 Greentech Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greentech Metals has no effect on the direction of Citigroup i.e., Citigroup and Greentech Metals go up and down completely randomly.
Pair Corralation between Citigroup and Greentech Metals
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.3 times more return on investment than Greentech Metals. However, Citigroup is 3.37 times less risky than Greentech Metals. It trades about 0.13 of its potential returns per unit of risk. Greentech Metals is currently generating about 0.04 per unit of risk. If you would invest 6,104 in Citigroup on August 28, 2024 and sell it today you would earn a total of 971.00 from holding Citigroup or generate 15.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Citigroup vs. Greentech Metals
Performance |
| Timeline |
| Citigroup |
| Greentech Metals |
Citigroup and Greentech Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Greentech Metals
The main advantage of trading using opposite Citigroup and Greentech Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Greentech Metals 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 Greentech Metals will offset losses from the drop in Greentech Metals' long position.| Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
| Greentech Metals vs. Northern Star Resources | Greentech Metals vs. Evolution Mining | Greentech Metals vs. Bluescope Steel | Greentech Metals vs. Sandfire Resources NL |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |