Correlation Between Citigroup and International Metals
Can any of the company-specific risk be diversified away by investing in both Citigroup and International 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 International Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and International Metals Mining, you can compare the effects of market volatilities on Citigroup and International 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 International Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and International Metals.
Diversification Opportunities for Citigroup and International Metals
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and International is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and International Metals Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International 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 International Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Metals has no effect on the direction of Citigroup i.e., Citigroup and International Metals go up and down completely randomly.
Pair Corralation between Citigroup and International Metals
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.31 times more return on investment than International Metals. However, Citigroup is 3.28 times less risky than International Metals. It trades about 0.07 of its potential returns per unit of risk. International Metals Mining is currently generating about -0.05 per unit of risk. If you would invest 7,196 in Citigroup on October 12, 2024 and sell it today you would earn a total of 130.00 from holding Citigroup or generate 1.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Citigroup vs. International Metals Mining
Performance |
| Timeline |
| Citigroup |
| International Metals |
Citigroup and International Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and International Metals
The main advantage of trading using opposite Citigroup and International Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, International 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 International Metals will offset losses from the drop in International Metals' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| International Metals vs. Verizon Communications CDR | International Metals vs. Nova Leap Health | International Metals vs. Champion Iron | International Metals vs. UnitedHealth Group CDR |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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