Correlation Between Citigroup and Elevate Uranium

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

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

Diversification Opportunities for Citigroup and Elevate Uranium

0.15

Correlation Coefficient

Citigroup  Elevate Uranium

Average diversification

The 3 months correlation between Citigroup and Elevate is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Elevate Uranium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elevate Uranium 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 Elevate Uranium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elevate Uranium has no effect on the direction of Citigroup i.e., Citigroup and Elevate Uranium go up and down completely randomly.

Pair Corralation between Citigroup and Elevate Uranium

Taking into account the 90-day investment horizon Citigroup is expected to generate 10.33 times less return on investment than Elevate Uranium. But when comparing it to its historical volatility, Citigroup is 5.44 times less risky than Elevate Uranium. It trades about 0.03 of its potential returns per unit of risk. Elevate Uranium is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  16.00  in Elevate Uranium on December 29, 2024 and sell it today you would earn a total of  1.00  from holding Elevate Uranium or generate 6.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Citigroup  vs.  Elevate Uranium

Citigroup

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 2 (%) 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.

Elevate Uranium

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Elevate Uranium are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Elevate Uranium reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and Elevate Uranium

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

The idea behind Citigroup and Elevate Uranium 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .