Correlation Between Citrine Global and Frontera

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

By analyzing existing cross correlation between Citrine Global Corp and Frontera Group, you can compare the effects of market volatilities on Citrine Global and Frontera 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 Citrine Global with a short position of Frontera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citrine Global and Frontera.

Diversification Opportunities for Citrine Global and Frontera

0.0

Correlation Coefficient

Citrine Global  Frontera

Pay attention - limited upside

The 3 months correlation between Citrine and Frontera is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Citrine Global Corp and Frontera Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frontera Group and Citrine Global 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 Citrine Global Corp are associated (or correlated) with Frontera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frontera Group has no effect on the direction of Citrine Global i.e., Citrine Global and Frontera go up and down completely randomly.

Pair Corralation between Citrine Global and Frontera

Given the investment horizon of 90 days Citrine Global is expected to generate 1.66 times less return on investment than Frontera. But when comparing it to its historical volatility, Citrine Global Corp is 1.07 times less risky than Frontera. It trades about 0.01 of its potential returns per unit of risk. Frontera Group is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  0.90  in Frontera Group on October 10, 2024 and sell it today you would lose (0.89) from holding Frontera Group or give up 98.89% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Citrine Global Corp  vs.  Frontera Group

Citrine Global Corp

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Citrine Global Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Frontera Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Frontera Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Frontera is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Citrine Global and Frontera

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

The idea behind Citrine Global Corp and Frontera Group 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.