Correlation Between Citigroup and Sandstorm Gold
Can any of the company-specific risk be diversified away by investing in both Citigroup and Sandstorm Gold 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 Sandstorm Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Sandstorm Gold Ltd, you can compare the effects of market volatilities on Citigroup and Sandstorm Gold 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 Sandstorm Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Sandstorm Gold.
Diversification Opportunities for Citigroup and Sandstorm Gold
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Citigroup and Sandstorm is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Sandstorm Gold Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sandstorm Gold 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 Sandstorm Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sandstorm Gold has no effect on the direction of Citigroup i.e., Citigroup and Sandstorm Gold go up and down completely randomly.
Pair Corralation between Citigroup and Sandstorm Gold
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.95 times more return on investment than Sandstorm Gold. However, Citigroup is 1.06 times less risky than Sandstorm Gold. It trades about 0.06 of its potential returns per unit of risk. Sandstorm Gold Ltd is currently generating about 0.01 per unit of risk. If you would invest 6,131 in Citigroup on August 24, 2024 and sell it today you would earn a total of 764.00 from holding Citigroup or generate 12.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Sandstorm Gold Ltd
Performance |
| Timeline |
| Citigroup |
| Sandstorm Gold |
Citigroup and Sandstorm Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Sandstorm Gold
The main advantage of trading using opposite Citigroup and Sandstorm Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Sandstorm Gold 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 Sandstorm Gold will offset losses from the drop in Sandstorm Gold's long position.| Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Royal Bank of | Citigroup vs. JPMorgan Chase Co |
| Sandstorm Gold vs. Osisko Gold Ro | Sandstorm Gold vs. Wheaton Precious Metals | Sandstorm Gold vs. Seabridge Gold | Sandstorm Gold vs. MAG 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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