Correlation Between Citrine Global and Winsome Resources

Can any of the company-specific risk be diversified away by investing in both Citrine Global and Winsome 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 Citrine Global and Winsome Resources 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 Winsome Resources Limited, you can compare the effects of market volatilities on Citrine Global and Winsome 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 Citrine Global with a short position of Winsome Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citrine Global and Winsome Resources.

Diversification Opportunities for Citrine Global and Winsome Resources

0.67

Correlation Coefficient

Citrine Global  Winsome Resources

Poor diversification

The 3 months correlation between Citrine and Winsome is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Citrine Global Corp and Winsome Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Winsome Resources 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 Winsome Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Winsome Resources has no effect on the direction of Citrine Global i.e., Citrine Global and Winsome Resources go up and down completely randomly.

Pair Corralation between Citrine Global and Winsome Resources

Given the investment horizon of 90 days Citrine Global Corp is expected to generate 1.95 times more return on investment than Winsome Resources. However, Citrine Global is 1.95 times more volatile than Winsome Resources Limited. It trades about 0.02 of its potential returns per unit of risk. Winsome Resources Limited is currently generating about 0.01 per unit of risk. If you would invest  4.50  in Citrine Global Corp on October 9, 2024 and sell it today you would lose (4.47) from holding Citrine Global Corp or give up 99.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.8%
Values	Daily Returns

Citrine Global Corp  vs.  Winsome Resources Limited

Citrine Global Corp

Risk-Adjusted Performance

0 of 100

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 uncertain 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.

Winsome Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Winsome Resources Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's essential 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 Citrine Global and Winsome Resources

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

The idea behind Citrine Global Corp and Winsome Resources Limited 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .