Correlation Between Citigroup and Mammoth Resources

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

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

Diversification Opportunities for Citigroup and Mammoth Resources

-0.11

Correlation Coefficient

Citigroup  Mammoth Resources

Good diversification

The 3 months correlation between Citigroup and Mammoth is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Mammoth Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mammoth 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 Mammoth Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mammoth Resources Corp has no effect on the direction of Citigroup i.e., Citigroup and Mammoth Resources go up and down completely randomly.

Pair Corralation between Citigroup and Mammoth Resources

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.12 times more return on investment than Mammoth Resources. However, Citigroup is 8.55 times less risky than Mammoth Resources. It trades about -0.05 of its potential returns per unit of risk. Mammoth Resources Corp is currently generating about -0.2 per unit of risk. If you would invest  7,142  in Citigroup on October 4, 2024 and sell it today you would lose (103.00) from holding Citigroup or give up 1.44% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Citigroup  vs.  Mammoth Resources Corp

Citigroup

Risk-Adjusted Performance

9 of 100

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 unsteady fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

Mammoth Resources Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mammoth Resources Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Mammoth Resources is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Citigroup and Mammoth Resources

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

The idea behind Citigroup and Mammoth 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.

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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.