Correlation Between Citigroup and Taseko Mines

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

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

Diversification Opportunities for Citigroup and Taseko Mines

-0.8

Correlation Coefficient

Citigroup  Taseko Mines

Pay attention - limited upside

The 3 months correlation between Citigroup and Taseko is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Taseko Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taseko Mines 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 Taseko Mines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taseko Mines has no effect on the direction of Citigroup i.e., Citigroup and Taseko Mines go up and down completely randomly.

Pair Corralation between Citigroup and Taseko Mines

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.42 times more return on investment than Taseko Mines. However, Citigroup is 2.39 times less risky than Taseko Mines. It trades about 0.02 of its potential returns per unit of risk. Taseko Mines is currently generating about -0.07 per unit of risk. If you would invest  6,895  in Citigroup on September 22, 2024 and sell it today you would earn a total of  24.00  from holding Citigroup or generate 0.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Citigroup  vs.  Taseko Mines

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

Taseko Mines

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Taseko Mines has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Citigroup and Taseko Mines

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

The idea behind Citigroup and Taseko Mines 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 Valuation module to check real value of public entities based on technical and fundamental data.