Correlation Between Citigroup and IGO
Can any of the company-specific risk be diversified away by investing in both Citigroup and IGO 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 IGO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and IGO Limited, you can compare the effects of market volatilities on Citigroup and IGO 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 IGO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and IGO.
Diversification Opportunities for Citigroup and IGO
Excellent diversification
The 3 months correlation between Citigroup and IGO is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and IGO Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IGO Limited 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 IGO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IGO Limited has no effect on the direction of Citigroup i.e., Citigroup and IGO go up and down completely randomly.
Pair Corralation between Citigroup and IGO
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.27 times more return on investment than IGO. However, Citigroup is 3.67 times less risky than IGO. It trades about 0.11 of its potential returns per unit of risk. IGO Limited is currently generating about 0.01 per unit of risk. If you would invest 4,567 in Citigroup on August 29, 2024 and sell it today you would earn a total of 2,408 from holding Citigroup or generate 52.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.19% |
| Values | Daily Returns |
Citigroup vs. IGO Limited
Performance |
| Timeline |
| Citigroup |
| IGO Limited |
Citigroup and IGO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and IGO
The main advantage of trading using opposite Citigroup and IGO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, IGO 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 IGO will offset losses from the drop in IGO's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| IGO vs. Grid Metals Corp | IGO vs. First American Silver | IGO vs. Qubec Nickel Corp | IGO vs. Lithium Australia 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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