Correlation Between Citigroup and Chakana Copper

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

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

Diversification Opportunities for Citigroup and Chakana Copper

-0.34

Correlation Coefficient

Citigroup  Chakana Copper

Very good diversification

The 3 months correlation between Citigroup and Chakana is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Chakana Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chakana Copper 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 Chakana Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chakana Copper Corp has no effect on the direction of Citigroup i.e., Citigroup and Chakana Copper go up and down completely randomly.

Pair Corralation between Citigroup and Chakana Copper

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.73 times less return on investment than Chakana Copper. But when comparing it to its historical volatility, Citigroup is 6.54 times less risky than Chakana Copper. It trades about 0.14 of its potential returns per unit of risk. Chakana Copper Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  2.50  in Chakana Copper Corp on September 23, 2024 and sell it today you would lose (0.25) from holding Chakana Copper Corp or give up 10.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.73%
Values	Daily Returns

Citigroup  vs.  Chakana Copper Corp

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 uncertain fundamental indicators, Citigroup may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Chakana Copper Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Citigroup and Chakana Copper

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

The idea behind Citigroup and Chakana Copper 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.