Correlation Between Citigroup and Duketon Mining

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

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

Diversification Opportunities for Citigroup and Duketon Mining

-0.67

Correlation Coefficient

Citigroup  Duketon Mining

Excellent diversification

The 3 months correlation between Citigroup and Duketon is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Duketon Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duketon Mining 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 Duketon Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duketon Mining has no effect on the direction of Citigroup i.e., Citigroup and Duketon Mining go up and down completely randomly.

Pair Corralation between Citigroup and Duketon Mining

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.35 times more return on investment than Duketon Mining. However, Citigroup is 2.85 times less risky than Duketon Mining. It trades about 0.07 of its potential returns per unit of risk. Duketon Mining is currently generating about -0.04 per unit of risk. If you would invest  4,168  in Citigroup on September 20, 2024 and sell it today you would earn a total of  2,674  from holding Citigroup or generate 64.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.2%
Values	Daily Returns

Citigroup  vs.  Duketon Mining

Citigroup

Risk-Adjusted Performance

7 of 100

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 January 2025.

Duketon Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Duketon Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's primary indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Citigroup and Duketon Mining

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

The idea behind Citigroup and Duketon Mining 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.