Correlation Between Southern Copper and Citigroup
Can any of the company-specific risk be diversified away by investing in both Southern Copper 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 Southern Copper and Citigroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Southern Copper Corp and Citigroup, you can compare the effects of market volatilities on Southern Copper 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 Southern Copper with a short position of Citigroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southern Copper and Citigroup.
Diversification Opportunities for Southern Copper and Citigroup
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Southern and Citigroup is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Southern Copper Corp and Citigroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citigroup and Southern Copper 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 Southern Copper Corp 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 Southern Copper i.e., Southern Copper and Citigroup go up and down completely randomly.
Pair Corralation between Southern Copper and Citigroup
Assuming the 90 days trading horizon Southern Copper Corp is expected to under-perform the Citigroup. In addition to that, Southern Copper is 2.25 times more volatile than Citigroup. It trades about 0.0 of its total potential returns per unit of risk. Citigroup is currently generating about 0.51 per unit of volatility. If you would invest 6,812 in Citigroup on September 15, 2024 and sell it today you would earn a total of 320.00 from holding Citigroup or generate 4.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 52.38% |
| Values | Daily Returns |
Southern Copper Corp vs. Citigroup
Performance |
| Timeline |
| Southern Copper Corp |
| Citigroup |
Southern Copper and Citigroup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southern Copper and Citigroup
The main advantage of trading using opposite Southern Copper and Citigroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southern Copper 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.| Southern Copper vs. Nexa Resources Peru | Southern Copper vs. Citigroup | Southern Copper vs. Compania de Minas | Southern Copper vs. Compania Minera Poderosa |
| Citigroup vs. Bank of America | Citigroup vs. InRetail Peru Corp | Citigroup vs. Banco de Credito | Citigroup vs. Southern 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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