Correlation Between Citigroup and Alta Copper

Can any of the company-specific risk be diversified away by investing in both Citigroup and Alta Copper 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 Alta Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Citigroup and Alta Copper Corp, you can compare the effects of market volatilities on Citigroup and Alta Copper 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 Alta Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Alta Copper.

Diversification Opportunities for Citigroup and Alta Copper

-0.32

Correlation Coefficient

Citigroup  Alta Copper

Very good diversification

The 3 months correlation between Citigroup and Alta is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Alta Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alta Copper 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 Alta Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alta Copper Corp has no effect on the direction of Citigroup i.e., Citigroup and Alta Copper go up and down completely randomly.

Pair Corralation between Citigroup and Alta Copper

Assuming the 90 days horizon Citigroup is expected to generate 0.43 times more return on investment than Alta Copper. However, Citigroup is 2.35 times less risky than Alta Copper. It trades about 0.07 of its potential returns per unit of risk. Alta Copper Corp is currently generating about 0.01 per unit of risk. If you would invest  5,105  in Citigroup on October 11, 2024 and sell it today you would earn a total of  2,160  from holding Citigroup or generate 42.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	85.53%
Values	Daily Returns

Citigroup  vs.  Alta Copper Corp

Citigroup

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Citigroup has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very inconsistent forward indicators, Citigroup displayed solid returns over the last few months and may actually be approaching a breakup point.

Alta Copper Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alta Copper Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Alta Copper is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Citigroup and Alta Copper

The main advantage of trading using opposite Citigroup and Alta Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Alta Copper 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 Alta Copper will offset losses from the drop in Alta Copper's long position.

The idea behind Citigroup and Alta Copper Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.