Correlation Between Citigroup and Idaho Strategic

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

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

Diversification Opportunities for Citigroup and Idaho Strategic

-0.82

Correlation Coefficient

Citigroup  Idaho Strategic

Pay attention - limited upside

The 3 months correlation between Citigroup and Idaho is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Idaho Strategic Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Idaho Strategic Resources 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 Idaho Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Idaho Strategic Resources has no effect on the direction of Citigroup i.e., Citigroup and Idaho Strategic go up and down completely randomly.

Pair Corralation between Citigroup and Idaho Strategic

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.3 times more return on investment than Idaho Strategic. However, Citigroup is 3.3 times less risky than Idaho Strategic. It trades about 0.06 of its potential returns per unit of risk. Idaho Strategic Resources is currently generating about -0.14 per unit of risk. If you would invest  6,828  in Citigroup on September 21, 2024 and sell it today you would earn a total of  91.00  from holding Citigroup or generate 1.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Citigroup  vs.  Idaho Strategic Resources

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.

Idaho Strategic Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Idaho Strategic Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Stock's fundamental indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Citigroup and Idaho Strategic

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

The idea behind Citigroup and Idaho Strategic Resources 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.