Correlation Between Citigroup and Crystal Peak

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

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

Diversification Opportunities for Citigroup and Crystal Peak

0.0

Correlation Coefficient

Citigroup  Crystal Peak

Pay attention - limited upside

The 3 months correlation between Citigroup and Crystal is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Crystal Peak Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crystal Peak Minerals 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 Crystal Peak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crystal Peak Minerals has no effect on the direction of Citigroup i.e., Citigroup and Crystal Peak go up and down completely randomly.

Pair Corralation between Citigroup and Crystal Peak

If you would invest  7,087  in Citigroup on September 30, 2024 and sell it today you would earn a total of  13.00  from holding Citigroup or generate 0.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Citigroup  vs.  Crystal Peak Minerals

Citigroup

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

Crystal Peak Minerals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Crystal Peak Minerals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Crystal Peak is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Citigroup and Crystal Peak

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

The idea behind Citigroup and Crystal Peak Minerals 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.