Correlation Between Citigroup and Centaurus Metals

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

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

Diversification Opportunities for Citigroup and Centaurus Metals

-0.2

Correlation Coefficient

Citigroup  Centaurus Metals

Good diversification

The 3 months correlation between Citigroup and Centaurus is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Centaurus Metals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centaurus Metals 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 Centaurus Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centaurus Metals has no effect on the direction of Citigroup i.e., Citigroup and Centaurus Metals go up and down completely randomly.

Pair Corralation between Citigroup and Centaurus Metals

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.55 times less return on investment than Centaurus Metals. But when comparing it to its historical volatility, Citigroup is 3.03 times less risky than Centaurus Metals. It trades about 0.15 of its potential returns per unit of risk. Centaurus Metals Limited is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  24.00  in Centaurus Metals Limited on September 8, 2025 and sell it today you would earn a total of  4.00  from holding Centaurus Metals Limited or generate 16.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Citigroup  vs.  Centaurus Metals Limited

Citigroup

Risk-Adjusted Performance

Good

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 exhibited solid returns over the last few months and may actually be approaching a breakup point.

Centaurus Metals

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Centaurus Metals Limited are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Centaurus Metals reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and Centaurus Metals

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

The idea behind Citigroup and Centaurus Metals 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 .