Correlation Between Citigroup and Norra Metals
Can any of the company-specific risk be diversified away by investing in both Citigroup and Norra Metals 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 Norra Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Norra Metals Corp, you can compare the effects of market volatilities on Citigroup and Norra Metals 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 Norra Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Norra Metals.
Diversification Opportunities for Citigroup and Norra Metals
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and Norra is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Norra Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Norra Metals Corp 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 Norra Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Norra Metals Corp has no effect on the direction of Citigroup i.e., Citigroup and Norra Metals go up and down completely randomly.
Pair Corralation between Citigroup and Norra Metals
Taking into account the 90-day investment horizon Citigroup is expected to generate 60.1 times less return on investment than Norra Metals. But when comparing it to its historical volatility, Citigroup is 47.65 times less risky than Norra Metals. It trades about 0.06 of its potential returns per unit of risk. Norra Metals Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1.96 in Norra Metals Corp on August 27, 2024 and sell it today you would lose (0.96) from holding Norra Metals Corp or give up 48.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Norra Metals Corp
Performance |
| Timeline |
| Citigroup |
| Norra Metals Corp |
Citigroup and Norra Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Norra Metals
The main advantage of trading using opposite Citigroup and Norra Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Norra Metals 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 Norra Metals will offset losses from the drop in Norra Metals' long position.| Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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