Correlation Between Citigroup and Yunnan Copper

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

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

Diversification Opportunities for Citigroup and Yunnan Copper

-0.29

Correlation Coefficient

Citigroup  Yunnan Copper

Very good diversification

The 3 months correlation between Citigroup and Yunnan is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Yunnan Copper Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yunnan Copper 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 Yunnan Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yunnan Copper has no effect on the direction of Citigroup i.e., Citigroup and Yunnan Copper go up and down completely randomly.

Pair Corralation between Citigroup and Yunnan Copper

Taking into account the 90-day investment horizon Citigroup is expected to generate 2.85 times less return on investment than Yunnan Copper. In addition to that, Citigroup is 1.23 times more volatile than Yunnan Copper Co. It trades about 0.01 of its total potential returns per unit of risk. Yunnan Copper Co is currently generating about 0.05 per unit of volatility. If you would invest  1,265  in Yunnan Copper Co on December 30, 2024 and sell it today you would earn a total of  54.00  from holding Yunnan Copper Co or generate 4.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.16%
Values	Daily Returns

Citigroup  vs.  Yunnan Copper Co

Citigroup

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Citigroup is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Yunnan Copper

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Yunnan Copper Co are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Yunnan Copper is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Citigroup and Yunnan Copper

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

The idea behind Citigroup and Yunnan Copper Co 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.