Correlation Between KGHM Polska and Citigroup

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

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

Diversification Opportunities for KGHM Polska and Citigroup

0.65

Correlation Coefficient

KGHM Polska  Citigroup

Poor diversification

The 3 months correlation between KGHM and Citigroup is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding KGHM Polska Miedz and Citigroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citigroup and KGHM Polska 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 KGHM Polska Miedz are associated (or correlated) with Citigroup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citigroup has no effect on the direction of KGHM Polska i.e., KGHM Polska and Citigroup go up and down completely randomly.

Pair Corralation between KGHM Polska and Citigroup

Assuming the 90 days trading horizon KGHM Polska is expected to generate 3.45 times less return on investment than Citigroup. In addition to that, KGHM Polska is 1.51 times more volatile than Citigroup. It trades about 0.06 of its total potential returns per unit of risk. Citigroup is currently generating about 0.34 per unit of volatility. If you would invest  5,860  in Citigroup on April 23, 2025 and sell it today you would earn a total of  2,161  from holding Citigroup or generate 36.88% return on investment over 90 days.

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

KGHM Polska Miedz  vs.  Citigroup

KGHM Polska Miedz

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in KGHM Polska Miedz are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady technical indicators, KGHM Polska may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Citigroup

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 26 (%) 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.

Pair Trading with KGHM Polska and Citigroup

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

The idea behind KGHM Polska Miedz and Citigroup 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.