Correlation Between Citigroup and Aris Gold

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

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

Diversification Opportunities for Citigroup and Aris Gold

0.49

Correlation Coefficient

Citigroup  Aris Gold

Very weak diversification

The 3 months correlation between Citigroup and Aris is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Aris Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aris Gold 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 Aris Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aris Gold Corp has no effect on the direction of Citigroup i.e., Citigroup and Aris Gold go up and down completely randomly.

Pair Corralation between Citigroup and Aris Gold

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.61 times more return on investment than Aris Gold. However, Citigroup is 1.63 times less risky than Aris Gold. It trades about 0.09 of its potential returns per unit of risk. Aris Gold Corp is currently generating about 0.02 per unit of risk. If you would invest  7,101  in Citigroup on December 4, 2024 and sell it today you would earn a total of  616.00  from holding Citigroup or generate 8.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

Citigroup  vs.  Aris Gold Corp

Citigroup

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Citigroup may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Aris Gold Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Aris Gold Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Aris Gold is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Citigroup and Aris Gold

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

The idea behind Citigroup and Aris Gold 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.