Correlation Between Citigroup and Metalla Royalty

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

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

Diversification Opportunities for Citigroup and Metalla Royalty

-0.47

Correlation Coefficient

Citigroup  Metalla Royalty

Very good diversification

The 3 months correlation between Citigroup and Metalla is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Metalla Royalty Streaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metalla Royalty Streaming 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 Metalla Royalty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metalla Royalty Streaming has no effect on the direction of Citigroup i.e., Citigroup and Metalla Royalty go up and down completely randomly.

Pair Corralation between Citigroup and Metalla Royalty

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.45 times more return on investment than Metalla Royalty. However, Citigroup is 2.2 times less risky than Metalla Royalty. It trades about 0.06 of its potential returns per unit of risk. Metalla Royalty Streaming is currently generating about -0.11 per unit of risk. If you would invest  6,828  in Citigroup on September 21, 2024 and sell it today you would earn a total of  91.00  from holding Citigroup or generate 1.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.65%
Values	Daily Returns

Citigroup  vs.  Metalla Royalty Streaming

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.

Metalla Royalty Streaming

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Metalla Royalty Streaming has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Citigroup and Metalla Royalty

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

The idea behind Citigroup and Metalla Royalty Streaming 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.