Correlation Between Citigroup and GMK Norilskiy

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

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

Diversification Opportunities for Citigroup and GMK Norilskiy

0.0

Correlation Coefficient

Citigroup  GMK Norilskiy

Pay attention - limited upside

The 3 months correlation between Citigroup and GMK is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and GMK Norilskiy Nikel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GMK Norilskiy Nikel 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 GMK Norilskiy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GMK Norilskiy Nikel has no effect on the direction of Citigroup i.e., Citigroup and GMK Norilskiy go up and down completely randomly.

Pair Corralation between Citigroup and GMK Norilskiy

If you would invest  7,086  in Citigroup on December 26, 2024 and sell it today you would earn a total of  238.00  from holding Citigroup or generate 3.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Citigroup  vs.  GMK Norilskiy Nikel

Citigroup

Risk-Adjusted Performance

Insignificant

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 recent stock price tumult, may contribute to shorter-term losses for the shareholders.

GMK Norilskiy Nikel

Risk-Adjusted Performance

Very Weak

Over the last 90 days GMK Norilskiy Nikel has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, GMK Norilskiy is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Citigroup and GMK Norilskiy

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

The idea behind Citigroup and GMK Norilskiy Nikel 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.