Correlation Between Citigroup and Silvercorp Metals
Can any of the company-specific risk be diversified away by investing in both Citigroup and Silvercorp 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 Silvercorp Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Silvercorp Metals, you can compare the effects of market volatilities on Citigroup and Silvercorp 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 Silvercorp Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Silvercorp Metals.
Diversification Opportunities for Citigroup and Silvercorp Metals
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and Silvercorp is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Silvercorp Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silvercorp 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 Silvercorp Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silvercorp Metals has no effect on the direction of Citigroup i.e., Citigroup and Silvercorp Metals go up and down completely randomly.
Pair Corralation between Citigroup and Silvercorp Metals
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.51 times more return on investment than Silvercorp Metals. However, Citigroup is 1.95 times less risky than Silvercorp Metals. It trades about 0.02 of its potential returns per unit of risk. Silvercorp Metals is currently generating about -0.13 per unit of risk. If you would invest 6,895 in Citigroup on September 22, 2024 and sell it today you would earn a total of 24.00 from holding Citigroup or generate 0.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Citigroup vs. Silvercorp Metals
Performance |
| Timeline |
| Citigroup |
| Silvercorp Metals |
Citigroup and Silvercorp Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Silvercorp Metals
The main advantage of trading using opposite Citigroup and Silvercorp Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Silvercorp 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 Silvercorp Metals will offset losses from the drop in Silvercorp Metals' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Silvercorp Metals vs. Pan American Silver | Silvercorp Metals vs. First Majestic Silver | Silvercorp Metals vs. MAG Silver Corp | Silvercorp Metals vs. Endeavour Silver 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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