Correlation Between Citigroup and Sanatana Resources
Can any of the company-specific risk be diversified away by investing in both Citigroup and Sanatana 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 Sanatana Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Sanatana Resources, you can compare the effects of market volatilities on Citigroup and Sanatana 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 Sanatana Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Sanatana Resources.
Diversification Opportunities for Citigroup and Sanatana Resources
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and Sanatana is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Sanatana Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanatana 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 Sanatana Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanatana Resources has no effect on the direction of Citigroup i.e., Citigroup and Sanatana Resources go up and down completely randomly.
Pair Corralation between Citigroup and Sanatana Resources
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.18 times more return on investment than Sanatana Resources. However, Citigroup is 5.43 times less risky than Sanatana Resources. It trades about 0.21 of its potential returns per unit of risk. Sanatana Resources is currently generating about -0.22 per unit of risk. If you would invest 6,393 in Citigroup on August 31, 2024 and sell it today you would earn a total of 623.00 from holding Citigroup or generate 9.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Sanatana Resources
Performance |
| Timeline |
| Citigroup |
| Sanatana Resources |
Citigroup and Sanatana Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Sanatana Resources
The main advantage of trading using opposite Citigroup and Sanatana Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Sanatana 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 Sanatana Resources will offset losses from the drop in Sanatana Resources' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Sanatana Resources vs. Q Gold Resources | Sanatana Resources vs. Rainy Mountain Royalty | Sanatana Resources vs. Plato Gold Corp | Sanatana Resources vs. Gunpoint Exploration |
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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