Correlation Between Citigroup and Jourdan Resources
Can any of the company-specific risk be diversified away by investing in both Citigroup and Jourdan Resources 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 Jourdan Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Jourdan Resources, you can compare the effects of market volatilities on Citigroup and Jourdan Resources 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 Jourdan Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Jourdan Resources.
Diversification Opportunities for Citigroup and Jourdan Resources
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Citigroup and Jourdan is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Jourdan Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jourdan Resources 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 Jourdan Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jourdan Resources has no effect on the direction of Citigroup i.e., Citigroup and Jourdan Resources go up and down completely randomly.
Pair Corralation between Citigroup and Jourdan Resources
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.38 times less return on investment than Jourdan Resources. But when comparing it to its historical volatility, Citigroup is 8.47 times less risky than Jourdan Resources. It trades about 0.08 of its potential returns per unit of risk. Jourdan Resources is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 5.30 in Jourdan Resources on August 31, 2024 and sell it today you would lose (4.36) from holding Jourdan Resources or give up 82.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Citigroup vs. Jourdan Resources
Performance |
| Timeline |
| Citigroup |
| Jourdan Resources |
Citigroup and Jourdan Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Jourdan Resources
The main advantage of trading using opposite Citigroup and Jourdan Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Jourdan Resources 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 Jourdan Resources will offset losses from the drop in Jourdan Resources' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Jourdan Resources vs. Bravada Gold | Jourdan Resources vs. Golden Goliath Resources | Jourdan Resources vs. Silver Spruce Resources | Jourdan Resources vs. Lake Resources 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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