Correlation Between NioCorp Developments and Citigroup
Can any of the company-specific risk be diversified away by investing in both NioCorp Developments and Citigroup 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 NioCorp Developments and Citigroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NioCorp Developments Ltd and Citigroup, you can compare the effects of market volatilities on NioCorp Developments and Citigroup 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 NioCorp Developments with a short position of Citigroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of NioCorp Developments and Citigroup.
Diversification Opportunities for NioCorp Developments and Citigroup
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NioCorp and Citigroup is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding NioCorp Developments Ltd and Citigroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citigroup and NioCorp Developments 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 NioCorp Developments Ltd are associated (or correlated) with Citigroup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citigroup has no effect on the direction of NioCorp Developments i.e., NioCorp Developments and Citigroup go up and down completely randomly.
Pair Corralation between NioCorp Developments and Citigroup
Allowing for the 90-day total investment horizon NioCorp Developments Ltd is expected to generate 22.51 times more return on investment than Citigroup. However, NioCorp Developments is 22.51 times more volatile than Citigroup. It trades about 0.04 of its potential returns per unit of risk. Citigroup is currently generating about 0.08 per unit of risk. If you would invest 89.00 in NioCorp Developments Ltd on November 2, 2024 and sell it today you would earn a total of 137.00 from holding NioCorp Developments Ltd or generate 153.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NioCorp Developments Ltd vs. Citigroup
Performance |
| Timeline |
| NioCorp Developments |
| Citigroup |
NioCorp Developments and Citigroup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NioCorp Developments and Citigroup
The main advantage of trading using opposite NioCorp Developments and Citigroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NioCorp Developments position performs unexpectedly, Citigroup 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 Citigroup will offset losses from the drop in Citigroup's long position.| NioCorp Developments vs. Asure Software | NioCorp Developments vs. Amkor Technology | NioCorp Developments vs. Alto Neuroscience, | NioCorp Developments vs. National Storage REIT |
| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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