Correlation Between Citigroup and Ressources Minieres

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

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

Diversification Opportunities for Citigroup and Ressources Minieres

0.42

Correlation Coefficient

Citigroup  Ressources Minieres

Very weak diversification

The 3 months correlation between Citigroup and Ressources is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Ressources Minieres Radisson in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ressources Minieres 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 Ressources Minieres. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ressources Minieres has no effect on the direction of Citigroup i.e., Citigroup and Ressources Minieres go up and down completely randomly.

Pair Corralation between Citigroup and Ressources Minieres

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.29 times less return on investment than Ressources Minieres. But when comparing it to its historical volatility, Citigroup is 2.1 times less risky than Ressources Minieres. It trades about 0.01 of its potential returns per unit of risk. Ressources Minieres Radisson is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  33.00  in Ressources Minieres Radisson on December 30, 2024 and sell it today you would lose (1.00) from holding Ressources Minieres Radisson or give up 3.03% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.88%
Values	Daily Returns

Citigroup  vs.  Ressources Minieres Radisson

Citigroup

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 1 (%) 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.

Ressources Minieres

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ressources Minieres Radisson has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Ressources Minieres 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 Ressources Minieres

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

The idea behind Citigroup and Ressources Minieres Radisson 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.