Correlation Between Citigroup and Uranium Royalty
Can any of the company-specific risk be diversified away by investing in both Citigroup and Uranium Royalty 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 Uranium Royalty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Uranium Royalty Corp, you can compare the effects of market volatilities on Citigroup and Uranium Royalty 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 Uranium Royalty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Uranium Royalty.
Diversification Opportunities for Citigroup and Uranium Royalty
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citigroup and Uranium is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Uranium Royalty Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uranium Royalty 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 Uranium Royalty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uranium Royalty Corp has no effect on the direction of Citigroup i.e., Citigroup and Uranium Royalty go up and down completely randomly.
Pair Corralation between Citigroup and Uranium Royalty
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.73 times more return on investment than Uranium Royalty. However, Citigroup is 1.37 times less risky than Uranium Royalty. It trades about 0.21 of its potential returns per unit of risk. Uranium Royalty Corp is currently generating about -0.25 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 Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Uranium Royalty Corp
Performance |
| Timeline |
| Citigroup |
| Uranium Royalty Corp |
Citigroup and Uranium Royalty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Uranium Royalty
The main advantage of trading using opposite Citigroup and Uranium Royalty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Uranium Royalty 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 Uranium Royalty will offset losses from the drop in Uranium Royalty's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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