Correlation Between Citigroup and Transatlantic Mining
Can any of the company-specific risk be diversified away by investing in both Citigroup and Transatlantic 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 Transatlantic Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Transatlantic Mining Corp, you can compare the effects of market volatilities on Citigroup and Transatlantic 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 Transatlantic Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Transatlantic Mining.
Diversification Opportunities for Citigroup and Transatlantic Mining
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Transatlantic is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Transatlantic Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transatlantic Mining Corp 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 Transatlantic Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transatlantic Mining Corp has no effect on the direction of Citigroup i.e., Citigroup and Transatlantic Mining go up and down completely randomly.
Pair Corralation between Citigroup and Transatlantic Mining
Taking into account the 90-day investment horizon Citigroup is expected to generate 6.41 times less return on investment than Transatlantic Mining. But when comparing it to its historical volatility, Citigroup is 6.01 times less risky than Transatlantic Mining. It trades about 0.21 of its potential returns per unit of risk. Transatlantic Mining Corp is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 7.00 in Transatlantic Mining Corp on August 29, 2024 and sell it today you would earn a total of 4.00 from holding Transatlantic Mining Corp or generate 57.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Transatlantic Mining Corp
Performance |
| Timeline |
| Citigroup |
| Transatlantic Mining Corp |
Citigroup and Transatlantic Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Transatlantic Mining
The main advantage of trading using opposite Citigroup and Transatlantic Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Transatlantic 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 Transatlantic Mining will offset losses from the drop in Transatlantic Mining's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Transatlantic Mining vs. First Majestic Silver | Transatlantic Mining vs. Ivanhoe Energy | Transatlantic Mining vs. Orezone Gold Corp | Transatlantic Mining vs. Faraday Copper 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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