Correlation Between Citigroup and IperionX Limited
Can any of the company-specific risk be diversified away by investing in both Citigroup and IperionX Limited 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 IperionX Limited into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and IperionX Limited American, you can compare the effects of market volatilities on Citigroup and IperionX Limited 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 IperionX Limited. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and IperionX Limited.
Diversification Opportunities for Citigroup and IperionX Limited
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and IperionX is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and IperionX Limited American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IperionX Limited American 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 IperionX Limited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IperionX Limited American has no effect on the direction of Citigroup i.e., Citigroup and IperionX Limited go up and down completely randomly.
Pair Corralation between Citigroup and IperionX Limited
Taking into account the 90-day investment horizon Citigroup is expected to generate 3.86 times less return on investment than IperionX Limited. But when comparing it to its historical volatility, Citigroup is 3.7 times less risky than IperionX Limited. It trades about 0.07 of its potential returns per unit of risk. IperionX Limited American is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 610.00 in IperionX Limited American on October 20, 2024 and sell it today you would earn a total of 2,116 from holding IperionX Limited American or generate 346.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. IperionX Limited American
Performance |
| Timeline |
| Citigroup |
| IperionX Limited American |
Citigroup and IperionX Limited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and IperionX Limited
The main advantage of trading using opposite Citigroup and IperionX Limited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, IperionX Limited 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 IperionX Limited will offset losses from the drop in IperionX Limited's long position.| Citigroup vs. Bank of Montreal | Citigroup vs. Canadian Imperial Bank | Citigroup vs. Bank of Nova | Citigroup vs. JPMorgan Chase Co |
| IperionX Limited vs. Fury Gold Mines | IperionX Limited vs. EMX Royalty Corp | IperionX Limited vs. Materion | IperionX Limited vs. Ferroglobe PLC |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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