Correlation Between Citigroup and Centor Energy
Can any of the company-specific risk be diversified away by investing in both Citigroup and Centor 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 Centor Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Centor Energy, you can compare the effects of market volatilities on Citigroup and Centor 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 Centor Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Centor Energy.
Diversification Opportunities for Citigroup and Centor Energy
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and Centor is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Centor Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centor 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 Centor Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centor Energy has no effect on the direction of Citigroup i.e., Citigroup and Centor Energy go up and down completely randomly.
Pair Corralation between Citigroup and Centor Energy
If you would invest 6,360 in Citigroup on August 29, 2024 and sell it today you would earn a total of 615.00 from holding Citigroup or generate 9.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Centor Energy
Performance |
| Timeline |
| Citigroup |
| Centor Energy |
Citigroup and Centor Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Centor Energy
The main advantage of trading using opposite Citigroup and Centor Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Centor 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 Centor Energy will offset losses from the drop in Centor Energy's long position.The idea behind Citigroup and Centor Energy 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.| Centor Energy vs. Vale SA ADR | Centor Energy vs. BHP Group Limited | Centor Energy vs. Glencore PLC ADR | Centor Energy vs. Piedmont Lithium Ltd |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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