Correlation Between Citigroup and Baytex Energy
Can any of the company-specific risk be diversified away by investing in both Citigroup and Baytex Energy 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 Baytex Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Baytex Energy Corp, you can compare the effects of market volatilities on Citigroup and Baytex Energy 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 Baytex Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Baytex Energy.
Diversification Opportunities for Citigroup and Baytex Energy
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Citigroup and Baytex is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Baytex Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baytex Energy 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 Baytex Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baytex Energy Corp has no effect on the direction of Citigroup i.e., Citigroup and Baytex Energy go up and down completely randomly.
Pair Corralation between Citigroup and Baytex Energy
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.66 times more return on investment than Baytex Energy. However, Citigroup is 1.52 times less risky than Baytex Energy. It trades about 0.11 of its potential returns per unit of risk. Baytex Energy Corp is currently generating about -0.02 per unit of risk. If you would invest 4,567 in Citigroup on August 29, 2024 and sell it today you would earn a total of 2,408 from holding Citigroup or generate 52.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Citigroup vs. Baytex Energy Corp
Performance |
| Timeline |
| Citigroup |
| Baytex Energy Corp |
Citigroup and Baytex Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Baytex Energy
The main advantage of trading using opposite Citigroup and Baytex Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Baytex Energy 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 Baytex Energy will offset losses from the drop in Baytex Energy's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Baytex Energy vs. MEG Energy Corp | Baytex Energy vs. Whitecap Resources | Baytex Energy vs. Athabasca Oil Corp | Baytex Energy vs. Cenovus Energy |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Stocks Directory Find actively traded stocks across global markets | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |