Correlation Between Citigroup and Harfang Exploration
Can any of the company-specific risk be diversified away by investing in both Citigroup and Harfang Exploration 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 Harfang Exploration into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Harfang Exploration, you can compare the effects of market volatilities on Citigroup and Harfang Exploration 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 Harfang Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Harfang Exploration.
Diversification Opportunities for Citigroup and Harfang Exploration
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Citigroup and Harfang is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Harfang Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harfang Exploration 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 Harfang Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harfang Exploration has no effect on the direction of Citigroup i.e., Citigroup and Harfang Exploration go up and down completely randomly.
Pair Corralation between Citigroup and Harfang Exploration
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.73 times less return on investment than Harfang Exploration. But when comparing it to its historical volatility, Citigroup is 3.26 times less risky than Harfang Exploration. It trades about 0.26 of its potential returns per unit of risk. Harfang Exploration is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 4.54 in Harfang Exploration on September 1, 2024 and sell it today you would earn a total of 1.46 from holding Harfang Exploration or generate 32.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Citigroup vs. Harfang Exploration
Performance |
| Timeline |
| Citigroup |
| Harfang Exploration |
Citigroup and Harfang Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Harfang Exploration
The main advantage of trading using opposite Citigroup and Harfang Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Harfang Exploration 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 Harfang Exploration will offset losses from the drop in Harfang Exploration's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Harfang Exploration vs. Champion Bear Resources | Harfang Exploration vs. Edison Cobalt Corp | Harfang Exploration vs. Aurelia Metals Limited | Harfang Exploration vs. Fury Gold Mines |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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