Correlation Between RB Global and Citrine Global

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

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

Diversification Opportunities for RB Global and Citrine Global

-0.8

Correlation Coefficient

RB Global  Citrine Global

Pay attention - limited upside

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

Pair Corralation between RB Global and Citrine Global

Considering the 90-day investment horizon RB Global is expected to generate 0.18 times more return on investment than Citrine Global. However, RB Global is 5.47 times less risky than Citrine Global. It trades about 0.14 of its potential returns per unit of risk. Citrine Global Corp is currently generating about -0.18 per unit of risk. If you would invest  8,510  in RB Global on September 13, 2024 and sell it today you would earn a total of  1,091  from holding RB Global or generate 12.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

RB Global  vs.  Citrine Global Corp

RB Global

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in RB Global are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, RB Global sustained solid returns over the last few months and may actually be approaching a breakup point.

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 January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with RB Global and Citrine Global

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

The idea behind RB Global and Citrine Global Corp 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.