Correlation Between Citigroup and Meteoric Resources
Can any of the company-specific risk be diversified away by investing in both Citigroup and Meteoric 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 Meteoric Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Meteoric Resources NL, you can compare the effects of market volatilities on Citigroup and Meteoric 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 Meteoric Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Meteoric Resources.
Diversification Opportunities for Citigroup and Meteoric Resources
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Citigroup and Meteoric is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Meteoric Resources NL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meteoric 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 Meteoric Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meteoric Resources has no effect on the direction of Citigroup i.e., Citigroup and Meteoric Resources go up and down completely randomly.
Pair Corralation between Citigroup and Meteoric Resources
Taking into account the 90-day investment horizon Citigroup is expected to generate 9.53 times less return on investment than Meteoric Resources. But when comparing it to its historical volatility, Citigroup is 8.38 times less risky than Meteoric Resources. It trades about 0.07 of its potential returns per unit of risk. Meteoric Resources NL is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2.50 in Meteoric Resources NL on August 31, 2024 and sell it today you would earn a total of 4.00 from holding Meteoric Resources NL or generate 160.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.56% |
| Values | Daily Returns |
Citigroup vs. Meteoric Resources NL
Performance |
| Timeline |
| Citigroup |
| Meteoric Resources |
Citigroup and Meteoric Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Meteoric Resources
The main advantage of trading using opposite Citigroup and Meteoric Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Meteoric 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 Meteoric Resources will offset losses from the drop in Meteoric Resources' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Meteoric Resources vs. FARO Technologies | Meteoric Resources vs. ORMAT TECHNOLOGIES | Meteoric Resources vs. NetSol Technologies | Meteoric Resources vs. PKSHA TECHNOLOGY INC |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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