Correlation Between Citigroup and Nordic Mining
Can any of the company-specific risk be diversified away by investing in both Citigroup and Nordic Mining 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 Nordic Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Nordic Mining ASA, you can compare the effects of market volatilities on Citigroup and Nordic Mining 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 Nordic Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Nordic Mining.
Diversification Opportunities for Citigroup and Nordic Mining
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Nordic is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Nordic Mining ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordic Mining ASA 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 Nordic Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordic Mining ASA has no effect on the direction of Citigroup i.e., Citigroup and Nordic Mining go up and down completely randomly.
Pair Corralation between Citigroup and Nordic Mining
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.97 times more return on investment than Nordic Mining. However, Citigroup is 1.03 times less risky than Nordic Mining. It trades about 0.03 of its potential returns per unit of risk. Nordic Mining ASA is currently generating about 0.0 per unit of risk. If you would invest 5,717 in Citigroup on January 14, 2025 and sell it today you would earn a total of 447.00 from holding Citigroup or generate 7.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Citigroup vs. Nordic Mining ASA
Performance |
| Timeline |
| Citigroup |
| Nordic Mining ASA |
Citigroup and Nordic Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Nordic Mining
The main advantage of trading using opposite Citigroup and Nordic Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Nordic Mining 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 Nordic Mining will offset losses from the drop in Nordic Mining's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. Bank of America |
| Nordic Mining vs. Austevoll Seafood ASA | Nordic Mining vs. Nidaros Sparebank | Nordic Mining vs. Sunndal Sparebank | Nordic Mining vs. Norwegian Air Shuttle |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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