Correlation Between Citigroup and Integra Resources

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

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

Diversification Opportunities for Citigroup and Integra Resources

0.12

Correlation Coefficient

Citigroup  Integra Resources

Average diversification

The 3 months correlation between Citigroup and Integra is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Integra Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integra Resources 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 Integra Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integra Resources Corp has no effect on the direction of Citigroup i.e., Citigroup and Integra Resources go up and down completely randomly.

Pair Corralation between Citigroup and Integra Resources

Taking into account the 90-day investment horizon Citigroup is expected to generate 9.67 times less return on investment than Integra Resources. But when comparing it to its historical volatility, Citigroup is 1.72 times less risky than Integra Resources. It trades about 0.03 of its potential returns per unit of risk. Integra Resources Corp is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  124.00  in Integra Resources Corp on December 29, 2024 and sell it today you would earn a total of  53.00  from holding Integra Resources Corp or generate 42.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.83%
Values	Daily Returns

Citigroup  vs.  Integra Resources Corp

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.

Integra Resources Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Integra Resources Corp are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Integra Resources showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and Integra Resources

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

The idea behind Citigroup and Integra Resources 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.

Check out your portfolio center.

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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.