Correlation Between Citigroup and Rover Metals
Can any of the company-specific risk be diversified away by investing in both Citigroup and Rover 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 Rover Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Rover Metals Corp, you can compare the effects of market volatilities on Citigroup and Rover 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 Rover Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Rover Metals.
Diversification Opportunities for Citigroup and Rover Metals
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and Rover is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Rover Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rover 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 Rover Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rover Metals Corp has no effect on the direction of Citigroup i.e., Citigroup and Rover Metals go up and down completely randomly.
Pair Corralation between Citigroup and Rover Metals
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.12 times more return on investment than Rover Metals. However, Citigroup is 8.34 times less risky than Rover Metals. It trades about 0.26 of its potential returns per unit of risk. Rover Metals Corp is currently generating about -0.02 per unit of risk. If you would invest 6,361 in Citigroup on September 1, 2024 and sell it today you would earn a total of 726.00 from holding Citigroup or generate 11.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Citigroup vs. Rover Metals Corp
Performance |
| Timeline |
| Citigroup |
| Rover Metals Corp |
Citigroup and Rover Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Rover Metals
The main advantage of trading using opposite Citigroup and Rover Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Rover 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 Rover Metals will offset losses from the drop in Rover Metals' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Rover Metals vs. First Majestic Silver | Rover Metals vs. Ivanhoe Energy | Rover Metals vs. Orezone Gold Corp | Rover Metals vs. Faraday Copper 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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