Correlation Between Citigroup and Chesapeake Energy
Can any of the company-specific risk be diversified away by investing in both Citigroup and Chesapeake 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 Chesapeake Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Chesapeake Energy, you can compare the effects of market volatilities on Citigroup and Chesapeake 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 Chesapeake Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Chesapeake Energy.
Diversification Opportunities for Citigroup and Chesapeake Energy
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Chesapeake is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Chesapeake Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chesapeake Energy 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 Chesapeake Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chesapeake Energy has no effect on the direction of Citigroup i.e., Citigroup and Chesapeake Energy go up and down completely randomly.
Pair Corralation between Citigroup and Chesapeake Energy
If you would invest 6,360 in Citigroup on August 29, 2024 and sell it today you would earn a total of 656.00 from holding Citigroup or generate 10.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
Citigroup vs. Chesapeake Energy
Performance |
| Timeline |
| Citigroup |
| Chesapeake Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
Citigroup and Chesapeake Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Chesapeake Energy
The main advantage of trading using opposite Citigroup and Chesapeake Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Chesapeake 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 Chesapeake Energy will offset losses from the drop in Chesapeake Energy's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Chesapeake Energy vs. NGL Energy Partners | Chesapeake Energy vs. Global Partners LP | Chesapeake Energy vs. Crescent Energy Co |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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