Correlation Between Citigroup and Mechel OAO
Can any of the company-specific risk be diversified away by investing in both Citigroup and Mechel OAO 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 Mechel OAO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Mechel OAO, you can compare the effects of market volatilities on Citigroup and Mechel OAO 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 Mechel OAO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Mechel OAO.
Diversification Opportunities for Citigroup and Mechel OAO
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and Mechel is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Mechel OAO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mechel OAO 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 Mechel OAO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mechel OAO has no effect on the direction of Citigroup i.e., Citigroup and Mechel OAO go up and down completely randomly.
Pair Corralation between Citigroup and Mechel OAO
If you would invest 6,079 in Citigroup on September 1, 2024 and sell it today you would earn a total of 1,008 from holding Citigroup or generate 16.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 0.0% |
| Values | Daily Returns |
Citigroup vs. Mechel OAO
Performance |
| Timeline |
| Citigroup |
| Mechel OAO |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Citigroup and Mechel OAO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Mechel OAO
The main advantage of trading using opposite Citigroup and Mechel OAO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Mechel OAO 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 Mechel OAO will offset losses from the drop in Mechel OAO's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Mechel OAO vs. Biglari Holdings | Mechel OAO vs. Viemed Healthcare | Mechel OAO vs. Shake Shack | Mechel OAO vs. The Joint Corp |
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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