Correlation Between Citigroup and Galore Resources
Can any of the company-specific risk be diversified away by investing in both Citigroup and Galore 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 Galore Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Galore Resources, you can compare the effects of market volatilities on Citigroup and Galore 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 Galore Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Galore Resources.
Diversification Opportunities for Citigroup and Galore Resources
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and Galore is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Galore Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galore 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 Galore Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galore Resources has no effect on the direction of Citigroup i.e., Citigroup and Galore Resources go up and down completely randomly.
Pair Corralation between Citigroup and Galore Resources
Taking into account the 90-day investment horizon Citigroup is expected to generate 12.76 times less return on investment than Galore Resources. But when comparing it to its historical volatility, Citigroup is 31.01 times less risky than Galore Resources. It trades about 0.23 of its potential returns per unit of risk. Galore Resources is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1.00 in Galore Resources on September 13, 2024 and sell it today you would earn a total of 0.00 from holding Galore Resources or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Galore Resources
Performance |
| Timeline |
| Citigroup |
| Galore Resources |
Citigroup and Galore Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Galore Resources
The main advantage of trading using opposite Citigroup and Galore Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Galore 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 Galore Resources will offset losses from the drop in Galore Resources' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Galore Resources vs. Nicola Mining | Galore Resources vs. Endeavour Silver Corp | Galore Resources vs. NeXGold Mining Corp | Galore Resources vs. Orbit Garant Drilling |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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