Correlation Between Citigroup and Diversified Energy
Can any of the company-specific risk be diversified away by investing in both Citigroup and Diversified 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 Diversified Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Diversified Energy, you can compare the effects of market volatilities on Citigroup and Diversified 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 Diversified Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Diversified Energy.
Diversification Opportunities for Citigroup and Diversified Energy
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Citigroup and Diversified is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Diversified Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diversified 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 Diversified Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diversified Energy has no effect on the direction of Citigroup i.e., Citigroup and Diversified Energy go up and down completely randomly.
Pair Corralation between Citigroup and Diversified Energy
If you would invest 6,412 in Citigroup on August 30, 2024 and sell it today you would earn a total of 604.00 from holding Citigroup or generate 9.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
Citigroup vs. Diversified Energy
Performance |
| Timeline |
| Citigroup |
| Diversified Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Citigroup and Diversified Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Diversified Energy
The main advantage of trading using opposite Citigroup and Diversified Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Diversified 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 Diversified Energy will offset losses from the drop in Diversified Energy's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Diversified Energy vs. Pieridae Energy Limited | Diversified Energy vs. Southern Cross Media | Diversified Energy vs. Prospera Energy | Diversified Energy vs. Ngx Energy International |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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