Correlation Between CITIGROUP CDR and McEwen Mining

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

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

Diversification Opportunities for CITIGROUP CDR and McEwen Mining

0.84

Correlation Coefficient

CITIGROUP CDR  McEwen Mining

Very poor diversification

The 3 months correlation between CITIGROUP and McEwen is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding CITIGROUP CDR and McEwen Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McEwen Mining and CITIGROUP CDR 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 CDR are associated (or correlated) with McEwen Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of McEwen Mining has no effect on the direction of CITIGROUP CDR i.e., CITIGROUP CDR and McEwen Mining go up and down completely randomly.

Pair Corralation between CITIGROUP CDR and McEwen Mining

Assuming the 90 days trading horizon CITIGROUP CDR is expected to generate 0.49 times more return on investment than McEwen Mining. However, CITIGROUP CDR is 2.03 times less risky than McEwen Mining. It trades about 0.39 of its potential returns per unit of risk. McEwen Mining is currently generating about 0.19 per unit of risk. If you would invest  2,699  in CITIGROUP CDR on April 22, 2025 and sell it today you would earn a total of  1,217  from holding CITIGROUP CDR or generate 45.09% return on investment over 90 days.

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

CITIGROUP CDR  vs.  McEwen Mining

CITIGROUP CDR

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in CITIGROUP CDR are ranked lower than 30 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical and fundamental indicators, CITIGROUP CDR exhibited solid returns over the last few months and may actually be approaching a breakup point.

McEwen Mining

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in McEwen Mining are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, McEwen Mining displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CITIGROUP CDR and McEwen Mining

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

The idea behind CITIGROUP CDR and McEwen 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.