Correlation Between Citigroup and Interoil Exploration
Can any of the company-specific risk be diversified away by investing in both Citigroup and Interoil Exploration 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 Interoil Exploration into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Interoil Exploration and, you can compare the effects of market volatilities on Citigroup and Interoil Exploration 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 Interoil Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Interoil Exploration.
Diversification Opportunities for Citigroup and Interoil Exploration
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Interoil is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Interoil Exploration and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interoil Exploration and 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 Interoil Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interoil Exploration and has no effect on the direction of Citigroup i.e., Citigroup and Interoil Exploration go up and down completely randomly.
Pair Corralation between Citigroup and Interoil Exploration
Taking into account the 90-day investment horizon Citigroup is expected to generate 3.02 times less return on investment than Interoil Exploration. But when comparing it to its historical volatility, Citigroup is 3.49 times less risky than Interoil Exploration. It trades about 0.13 of its potential returns per unit of risk. Interoil Exploration and is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 210.00 in Interoil Exploration and on September 3, 2024 and sell it today you would earn a total of 89.00 from holding Interoil Exploration and or generate 42.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.46% |
| Values | Daily Returns |
Citigroup vs. Interoil Exploration and
Performance |
| Timeline |
| Citigroup |
| Interoil Exploration and |
Citigroup and Interoil Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Interoil Exploration
The main advantage of trading using opposite Citigroup and Interoil Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Interoil Exploration 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 Interoil Exploration will offset losses from the drop in Interoil Exploration's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Interoil Exploration vs. Questerre Energy | Interoil Exploration vs. Dno ASA | Interoil Exploration vs. Panoro Energy ASA | Interoil Exploration vs. Solstad Offsho |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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