Correlation Between Citigroup and Highland Copper
Can any of the company-specific risk be diversified away by investing in both Citigroup and Highland Copper 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 Highland Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Highland Copper, you can compare the effects of market volatilities on Citigroup and Highland Copper 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 Highland Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Highland Copper.
Diversification Opportunities for Citigroup and Highland Copper
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Citigroup and Highland is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Highland Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highland Copper 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 Highland Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highland Copper has no effect on the direction of Citigroup i.e., Citigroup and Highland Copper go up and down completely randomly.
Pair Corralation between Citigroup and Highland Copper
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.69 times more return on investment than Highland Copper. However, Citigroup is 1.44 times less risky than Highland Copper. It trades about 0.32 of its potential returns per unit of risk. Highland Copper is currently generating about 0.14 per unit of risk. If you would invest 6,235 in Citigroup on September 3, 2024 and sell it today you would earn a total of 852.00 from holding Citigroup or generate 13.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Highland Copper
Performance |
| Timeline |
| Citigroup |
| Highland Copper |
Citigroup and Highland Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Highland Copper
The main advantage of trading using opposite Citigroup and Highland Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Highland Copper 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 Highland Copper will offset losses from the drop in Highland Copper's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Highland Copper vs. Bell Copper | Highland Copper vs. CopperCorp Resources | Highland Copper vs. Dor Copper Mining | Highland Copper vs. Copper Fox Metals |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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