Correlation Between Citigroup and GREEN MINERALS

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

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

Diversification Opportunities for Citigroup and GREEN MINERALS

-0.33

Correlation Coefficient

Citigroup  GREEN MINERALS

Very good diversification

The 3 months correlation between Citigroup and GREEN is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and GREEN MINERALS NK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GREEN MINERALS NK 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 GREEN MINERALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GREEN MINERALS NK has no effect on the direction of Citigroup i.e., Citigroup and GREEN MINERALS go up and down completely randomly.

Pair Corralation between Citigroup and GREEN MINERALS

Taking into account the 90-day investment horizon Citigroup is expected to generate 2.71 times less return on investment than GREEN MINERALS. But when comparing it to its historical volatility, Citigroup is 6.33 times less risky than GREEN MINERALS. It trades about 0.06 of its potential returns per unit of risk. GREEN MINERALS NK is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  57.00  in GREEN MINERALS NK on October 8, 2024 and sell it today you would lose (30.00) from holding GREEN MINERALS NK or give up 52.63% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.0%
Values	Daily Returns

Citigroup  vs.  GREEN MINERALS NK

Citigroup

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

GREEN MINERALS NK

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GREEN MINERALS NK has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Citigroup and GREEN MINERALS

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

The idea behind Citigroup and GREEN MINERALS NK 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.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.