Correlation Between Citigroup and Jiangxi Copper

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Can any of the company-specific risk be diversified away by investing in both Citigroup and Jiangxi Copper 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 Jiangxi Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Jiangxi Copper, you can compare the effects of market volatilities on Citigroup and Jiangxi Copper 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 Jiangxi Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Jiangxi Copper.

Diversification Opportunities for Citigroup and Jiangxi Copper

-0.19
  Correlation Coefficient

Good diversification

The 3 months correlation between Citigroup and Jiangxi is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Jiangxi Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangxi Copper 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 Jiangxi Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangxi Copper has no effect on the direction of Citigroup i.e., Citigroup and Jiangxi Copper go up and down completely randomly.

Pair Corralation between Citigroup and Jiangxi Copper

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.35 times more return on investment than Jiangxi Copper. However, Citigroup is 2.83 times less risky than Jiangxi Copper. It trades about 0.12 of its potential returns per unit of risk. Jiangxi Copper is currently generating about 0.03 per unit of risk. If you would invest  6,083  in Citigroup on September 24, 2024 and sell it today you would earn a total of  894.00  from holding Citigroup or generate 14.7% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy98.46%
ValuesDaily Returns

Citigroup  vs.  Jiangxi Copper

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -50510152025
JavaScript chart by amCharts 3.21.15C JIAXF
       Timeline  
Citigroup 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec62646668707274
Jiangxi Copper 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Jiangxi Copper are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, Jiangxi Copper may actually be approaching a critical reversion point that can send shares even higher in January 2025.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec1.51.61.71.81.9

Citigroup and Jiangxi Copper Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-5.77-4.32-2.87-1.420.02531.493.014.526.04 0.020.040.060.080.100.12
JavaScript chart by amCharts 3.21.15C JIAXF
       Returns  

Pair Trading with Citigroup and Jiangxi Copper

The main advantage of trading using opposite Citigroup and Jiangxi Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Jiangxi Copper 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 Jiangxi Copper will offset losses from the drop in Jiangxi Copper's long position.
The idea behind Citigroup and Jiangxi Copper 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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.

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