Correlation Between Citigroup and Rackla Metals
Can any of the company-specific risk be diversified away by investing in both Citigroup and Rackla 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 Rackla Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Rackla Metals, you can compare the effects of market volatilities on Citigroup and Rackla 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 Rackla Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Rackla Metals.
Diversification Opportunities for Citigroup and Rackla Metals
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Citigroup and Rackla is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Rackla Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rackla Metals 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 Rackla Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rackla Metals has no effect on the direction of Citigroup i.e., Citigroup and Rackla Metals go up and down completely randomly.
Pair Corralation between Citigroup and Rackla Metals
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.09 times more return on investment than Rackla Metals. However, Citigroup is 11.03 times less risky than Rackla Metals. It trades about -0.02 of its potential returns per unit of risk. Rackla Metals is currently generating about -0.11 per unit of risk. If you would invest 8,051 in Citigroup on November 27, 2024 and sell it today you would lose (86.00) from holding Citigroup or give up 1.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Rackla Metals
Performance |
| Timeline |
| Citigroup |
| Rackla Metals |
Citigroup and Rackla Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Rackla Metals
The main advantage of trading using opposite Citigroup and Rackla Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Rackla 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 Rackla Metals will offset losses from the drop in Rackla Metals' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Rackla Metals vs. TRU Precious Metals | Rackla Metals vs. North Peak Resources | Rackla Metals vs. Augusta Gold Corp | Rackla Metals vs. Nine Mile Metals |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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