Correlation Between Citigroup and Skyharbour Resources
Can any of the company-specific risk be diversified away by investing in both Citigroup and Skyharbour 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 Skyharbour Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Skyharbour Resources, you can compare the effects of market volatilities on Citigroup and Skyharbour 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 Skyharbour Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Skyharbour Resources.
Diversification Opportunities for Citigroup and Skyharbour Resources
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Citigroup and Skyharbour is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Skyharbour Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skyharbour 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 Skyharbour Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Skyharbour Resources has no effect on the direction of Citigroup i.e., Citigroup and Skyharbour Resources go up and down completely randomly.
Pair Corralation between Citigroup and Skyharbour Resources
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.4 times more return on investment than Skyharbour Resources. However, Citigroup is 2.51 times less risky than Skyharbour Resources. It trades about 0.13 of its potential returns per unit of risk. Skyharbour Resources is currently generating about 0.01 per unit of risk. If you would invest 4,053 in Citigroup on September 1, 2024 and sell it today you would earn a total of 3,034 from holding Citigroup or generate 74.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
Citigroup vs. Skyharbour Resources
Performance |
| Timeline |
| Citigroup |
| Skyharbour Resources |
Citigroup and Skyharbour Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Skyharbour Resources
The main advantage of trading using opposite Citigroup and Skyharbour Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Skyharbour 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 Skyharbour Resources will offset losses from the drop in Skyharbour Resources' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Skyharbour Resources vs. GoviEx Uranium | Skyharbour Resources vs. CanAlaska Uranium | Skyharbour Resources vs. Fission Uranium Corp | Skyharbour Resources vs. Deep Yellow |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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