Correlation Between Citigroup and Sayona Mining
Can any of the company-specific risk be diversified away by investing in both Citigroup and Sayona Mining 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 Sayona Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Sayona Mining, you can compare the effects of market volatilities on Citigroup and Sayona Mining 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 Sayona Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Sayona Mining.
Diversification Opportunities for Citigroup and Sayona Mining
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and Sayona is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Sayona Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sayona Mining 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 Sayona Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sayona Mining has no effect on the direction of Citigroup i.e., Citigroup and Sayona Mining go up and down completely randomly.
Pair Corralation between Citigroup and Sayona Mining
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.37 times more return on investment than Sayona Mining. However, Citigroup is 2.72 times less risky than Sayona Mining. It trades about 0.09 of its potential returns per unit of risk. Sayona Mining is currently generating about -0.02 per unit of risk. If you would invest 5,700 in Citigroup on October 12, 2024 and sell it today you would earn a total of 1,626 from holding Citigroup or generate 28.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.47% |
| Values | Daily Returns |
Citigroup vs. Sayona Mining
Performance |
| Timeline |
| Citigroup |
| Sayona Mining |
Citigroup and Sayona Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Sayona Mining
The main advantage of trading using opposite Citigroup and Sayona Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Sayona Mining 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 Sayona Mining will offset losses from the drop in Sayona Mining's long position.| Citigroup vs. Royal Bank of | Citigroup vs. JPMorgan Chase Co | Citigroup vs. Nu Holdings | Citigroup vs. Canadian Imperial Bank |
| Sayona Mining vs. Hutchison Telecommunications | Sayona Mining vs. Ainsworth Game Technology | Sayona Mining vs. ACDC Metals | Sayona Mining vs. Insurance Australia Group |
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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