Correlation Between Citigroup and High Arctic
Can any of the company-specific risk be diversified away by investing in both Citigroup and High Arctic 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 High Arctic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and High Arctic Energy, you can compare the effects of market volatilities on Citigroup and High Arctic 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 High Arctic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and High Arctic.
Diversification Opportunities for Citigroup and High Arctic
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Citigroup and High is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and High Arctic Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Arctic 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 High Arctic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Arctic Energy has no effect on the direction of Citigroup i.e., Citigroup and High Arctic go up and down completely randomly.
Pair Corralation between Citigroup and High Arctic
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.06 times more return on investment than High Arctic. However, Citigroup is 1.06 times more volatile than High Arctic Energy. It trades about 0.26 of its potential returns per unit of risk. High Arctic Energy is currently generating about -0.05 per unit of risk. If you would invest 6,361 in Citigroup on September 1, 2024 and sell it today you would earn a total of 726.00 from holding Citigroup or generate 11.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. High Arctic Energy
Performance |
| Timeline |
| Citigroup |
| High Arctic Energy |
Citigroup and High Arctic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and High Arctic
The main advantage of trading using opposite Citigroup and High Arctic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, High Arctic 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 High Arctic will offset losses from the drop in High Arctic's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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