Correlation Between Citigroup and Giyani Metals

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

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

Diversification Opportunities for Citigroup and Giyani Metals

0.34

Correlation Coefficient

Citigroup  Giyani Metals

Weak diversification

The 3 months correlation between Citigroup and Giyani is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Giyani Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Giyani Metals 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 Giyani Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Giyani Metals Corp has no effect on the direction of Citigroup i.e., Citigroup and Giyani Metals go up and down completely randomly.

Pair Corralation between Citigroup and Giyani Metals

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.86 times less return on investment than Giyani Metals. But when comparing it to its historical volatility, Citigroup is 4.91 times less risky than Giyani Metals. It trades about 0.07 of its potential returns per unit of risk. Giyani Metals Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  11.00  in Giyani Metals Corp on September 3, 2024 and sell it today you would lose (4.00) from holding Giyani Metals Corp or give up 36.36% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Citigroup  vs.  Giyani Metals Corp

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.

Giyani Metals Corp

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Giyani Metals Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal basic indicators, Giyani Metals reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and Giyani Metals

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

The idea behind Citigroup and Giyani Metals 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.