Correlation Between Citigroup and Greenvale Mining

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

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

Diversification Opportunities for Citigroup and Greenvale Mining

0.21

Correlation Coefficient

Citigroup  Greenvale Mining

Modest diversification

The 3 months correlation between Citigroup and Greenvale is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Greenvale Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenvale 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 Greenvale Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenvale Mining has no effect on the direction of Citigroup i.e., Citigroup and Greenvale Mining go up and down completely randomly.

Pair Corralation between Citigroup and Greenvale Mining

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.25 times more return on investment than Greenvale Mining. However, Citigroup is 3.94 times less risky than Greenvale Mining. It trades about 0.04 of its potential returns per unit of risk. Greenvale Mining Limited is currently generating about -0.13 per unit of risk. If you would invest  6,929  in Citigroup on December 22, 2024 and sell it today you would earn a total of  269.00  from holding Citigroup or generate 3.88% return on investment over 90 days.

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

Citigroup  vs.  Greenvale Mining Limited

Citigroup

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 3 (%) 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 recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Greenvale Mining

Risk-Adjusted Performance

Very Weak

Over the last 90 days Greenvale Mining Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's primary indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Citigroup and Greenvale Mining

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

The idea behind Citigroup and Greenvale Mining Limited 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.