Correlation Between Citigroup and Denarius Silver

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

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

Diversification Opportunities for Citigroup and Denarius Silver

0.48

Correlation Coefficient

Citigroup  Denarius Silver

Very weak diversification

The 3 months correlation between Citigroup and Denarius is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Denarius Silver Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Denarius Silver 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 Denarius Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Denarius Silver Corp has no effect on the direction of Citigroup i.e., Citigroup and Denarius Silver go up and down completely randomly.

Pair Corralation between Citigroup and Denarius Silver

Taking into account the 90-day investment horizon Citigroup is expected to generate 2.93 times less return on investment than Denarius Silver. But when comparing it to its historical volatility, Citigroup is 4.2 times less risky than Denarius Silver. It trades about 0.01 of its potential returns per unit of risk. Denarius Silver Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  48.00  in Denarius Silver Corp on December 30, 2024 and sell it today you would lose (7.00) from holding Denarius Silver Corp or give up 14.58% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.88%
Values	Daily Returns

Citigroup  vs.  Denarius Silver Corp

Citigroup

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Citigroup is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Denarius Silver Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Denarius Silver Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Denarius Silver is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Citigroup and Denarius Silver

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

The idea behind Citigroup and Denarius Silver 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.