Correlation Between Citigroup and Northcliff Resources

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

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

Diversification Opportunities for Citigroup and Northcliff Resources

-0.82

Correlation Coefficient

Citigroup  Northcliff Resources

Pay attention - limited upside

The 3 months correlation between Citigroup and Northcliff is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Northcliff Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northcliff Resources 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 Northcliff Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northcliff Resources has no effect on the direction of Citigroup i.e., Citigroup and Northcliff Resources go up and down completely randomly.

Pair Corralation between Citigroup and Northcliff Resources

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.08 times more return on investment than Northcliff Resources. However, Citigroup is 12.53 times less risky than Northcliff Resources. It trades about 0.14 of its potential returns per unit of risk. Northcliff Resources is currently generating about 0.0 per unit of risk. If you would invest  5,566  in Citigroup on March 2, 2024 and sell it today you would earn a total of  665.00  from holding Citigroup or generate 11.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Citigroup  vs.  Northcliff Resources

Citigroup

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 11 (%) 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 July 2024.

Northcliff Resources

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Citigroup and Northcliff Resources

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

The idea behind Citigroup and Northcliff Resources 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.