Correlation Between Citigroup and Torque Metals
Can any of the company-specific risk be diversified away by investing in both Citigroup and Torque Metals 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 Torque Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Torque Metals, you can compare the effects of market volatilities on Citigroup and Torque Metals 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 Torque Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Torque Metals.
Diversification Opportunities for Citigroup and Torque Metals
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and Torque is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Torque Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Torque Metals 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 Torque Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Torque Metals has no effect on the direction of Citigroup i.e., Citigroup and Torque Metals go up and down completely randomly.
Pair Corralation between Citigroup and Torque Metals
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.15 times less return on investment than Torque Metals. But when comparing it to its historical volatility, Citigroup is 5.99 times less risky than Torque Metals. It trades about 0.06 of its potential returns per unit of risk. Torque Metals is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 18.00 in Torque Metals on October 12, 2024 and sell it today you would lose (12.80) from holding Torque Metals or give up 71.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
Citigroup vs. Torque Metals
Performance |
| Timeline |
| Citigroup |
| Torque Metals |
Citigroup and Torque Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Torque Metals
The main advantage of trading using opposite Citigroup and Torque Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Torque Metals 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 Torque Metals will offset losses from the drop in Torque Metals' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Torque Metals vs. Aussie Broadband | Torque Metals vs. Hammer Metals | Torque Metals vs. Aurelia Metals | Torque Metals vs. Carawine Resources Limited |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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