Correlation Between Citigroup and Auriant Mining

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

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

Diversification Opportunities for Citigroup and Auriant Mining

-0.4

Correlation Coefficient

Citigroup  Auriant Mining

Very good diversification

The 3 months correlation between Citigroup and Auriant is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Auriant Mining AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auriant Mining AB 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 Auriant Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auriant Mining AB has no effect on the direction of Citigroup i.e., Citigroup and Auriant Mining go up and down completely randomly.

Pair Corralation between Citigroup and Auriant Mining

Taking into account the 90-day investment horizon Citigroup is expected to generate 3.87 times less return on investment than Auriant Mining. But when comparing it to its historical volatility, Citigroup is 7.07 times less risky than Auriant Mining. It trades about 0.15 of its potential returns per unit of risk. Auriant Mining AB is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  120.00  in Auriant Mining AB on September 5, 2024 and sell it today you would earn a total of  20.00  from holding Auriant Mining AB or generate 16.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Citigroup  vs.  Auriant Mining AB

Citigroup

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 11 (%) 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.

Auriant Mining AB

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Auriant Mining AB are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Auriant Mining unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and Auriant Mining

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

The idea behind Citigroup and Auriant Mining AB 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.