Correlation Between Citigroup and Dore Copper

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

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

Diversification Opportunities for Citigroup and Dore Copper

0.25

Correlation Coefficient

Citigroup  Dore Copper

Modest diversification

The 3 months correlation between Citigroup and Dore is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Dore Copper Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dore Copper Mining 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 Dore Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dore Copper Mining has no effect on the direction of Citigroup i.e., Citigroup and Dore Copper go up and down completely randomly.

Pair Corralation between Citigroup and Dore Copper

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.37 times more return on investment than Dore Copper. However, Citigroup is 2.7 times less risky than Dore Copper. It trades about 0.27 of its potential returns per unit of risk. Dore Copper Mining is currently generating about 0.01 per unit of risk. If you would invest  6,889  in Citigroup on September 14, 2024 and sell it today you would earn a total of  307.00  from holding Citigroup or generate 4.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Citigroup  vs.  Dore Copper Mining

Citigroup

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

Dore Copper Mining

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dore Copper Mining are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating primary indicators, Dore Copper showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and Dore Copper

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

The idea behind Citigroup and Dore Copper Mining 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.

Check out your portfolio center.

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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.