Correlation Between Citigroup and Impala Platinum
Can any of the company-specific risk be diversified away by investing in both Citigroup and Impala Platinum 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 Impala Platinum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Impala Platinum Holdings, you can compare the effects of market volatilities on Citigroup and Impala Platinum 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 Impala Platinum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Impala Platinum.
Diversification Opportunities for Citigroup and Impala Platinum
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citigroup and Impala is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Impala Platinum Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Impala Platinum Holdings 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 Impala Platinum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Impala Platinum Holdings has no effect on the direction of Citigroup i.e., Citigroup and Impala Platinum go up and down completely randomly.
Pair Corralation between Citigroup and Impala Platinum
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.45 times more return on investment than Impala Platinum. However, Citigroup is 2.25 times less risky than Impala Platinum. It trades about 0.26 of its potential returns per unit of risk. Impala Platinum Holdings is currently generating about -0.05 per unit of risk. If you would invest 6,361 in Citigroup on September 1, 2024 and sell it today you would earn a total of 726.00 from holding Citigroup or generate 11.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
Citigroup vs. Impala Platinum Holdings
Performance |
| Timeline |
| Citigroup |
| Impala Platinum Holdings |
Citigroup and Impala Platinum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Impala Platinum
The main advantage of trading using opposite Citigroup and Impala Platinum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Impala Platinum 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 Impala Platinum will offset losses from the drop in Impala Platinum's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Impala Platinum vs. BHP Group Limited | Impala Platinum vs. Rio Tinto Group | Impala Platinum vs. Rio Tinto Group | Impala Platinum vs. Vale SA |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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