Correlation Between Citigroup and SCOTTIE RESOURCES

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

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

Diversification Opportunities for Citigroup and SCOTTIE RESOURCES

-0.59

Correlation Coefficient

Citigroup  SCOTTIE RESOURCES

Excellent diversification

The 3 months correlation between Citigroup and SCOTTIE is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and SCOTTIE RESOURCES P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCOTTIE RESOURCES 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 SCOTTIE RESOURCES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCOTTIE RESOURCES has no effect on the direction of Citigroup i.e., Citigroup and SCOTTIE RESOURCES go up and down completely randomly.

Pair Corralation between Citigroup and SCOTTIE RESOURCES

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.06 times more return on investment than SCOTTIE RESOURCES. However, Citigroup is 16.31 times less risky than SCOTTIE RESOURCES. It trades about -0.05 of its potential returns per unit of risk. SCOTTIE RESOURCES P is currently generating about -0.24 per unit of risk. If you would invest  7,139  in Citigroup on October 3, 2024 and sell it today you would lose (100.00) from holding Citigroup or give up 1.4% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	85.71%
Values	Daily Returns

Citigroup  vs.  SCOTTIE RESOURCES P

Citigroup

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 10 (%) 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.

SCOTTIE RESOURCES

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SCOTTIE RESOURCES P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Citigroup and SCOTTIE RESOURCES

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

The idea behind Citigroup and SCOTTIE RESOURCES P 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.