Correlation Between Citigroup and Battalion Oil
Can any of the company-specific risk be diversified away by investing in both Citigroup and Battalion Oil 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 Battalion Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Battalion Oil Corp, you can compare the effects of market volatilities on Citigroup and Battalion Oil 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 Battalion Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Battalion Oil.
Diversification Opportunities for Citigroup and Battalion Oil
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Citigroup and Battalion is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Battalion Oil Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Battalion Oil Corp 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 Battalion Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Battalion Oil Corp has no effect on the direction of Citigroup i.e., Citigroup and Battalion Oil go up and down completely randomly.
Pair Corralation between Citigroup and Battalion Oil
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.17 times more return on investment than Battalion Oil. However, Citigroup is 5.76 times less risky than Battalion Oil. It trades about 0.25 of its potential returns per unit of risk. Battalion Oil Corp is currently generating about -0.16 per unit of risk. If you would invest 6,360 in Citigroup on August 28, 2024 and sell it today you would earn a total of 715.00 from holding Citigroup or generate 11.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Battalion Oil Corp
Performance |
| Timeline |
| Citigroup |
| Battalion Oil Corp |
Citigroup and Battalion Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Battalion Oil
The main advantage of trading using opposite Citigroup and Battalion Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Battalion Oil 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 Battalion Oil will offset losses from the drop in Battalion Oil's long position.| Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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