Correlation Between Citigroup and Murphy USA
Can any of the company-specific risk be diversified away by investing in both Citigroup and Murphy USA 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 Murphy USA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Murphy USA, you can compare the effects of market volatilities on Citigroup and Murphy USA 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 Murphy USA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Murphy USA.
Diversification Opportunities for Citigroup and Murphy USA
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Citigroup and Murphy is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Murphy USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Murphy USA 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 Murphy USA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Murphy USA has no effect on the direction of Citigroup i.e., Citigroup and Murphy USA go up and down completely randomly.
Pair Corralation between Citigroup and Murphy USA
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.02 times less return on investment than Murphy USA. In addition to that, Citigroup is 1.52 times more volatile than Murphy USA. It trades about 0.23 of its total potential returns per unit of risk. Murphy USA is currently generating about 0.36 per unit of volatility. If you would invest 47,332 in Murphy USA on August 24, 2024 and sell it today you would earn a total of 5,802 from holding Murphy USA or generate 12.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Murphy USA
Performance |
| Timeline |
| Citigroup |
| Murphy USA |
Citigroup and Murphy USA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Murphy USA
The main advantage of trading using opposite Citigroup and Murphy USA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Murphy USA 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 Murphy USA will offset losses from the drop in Murphy USA's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Murphy USA vs. Group 1 Automotive | Murphy USA vs. Murphy Oil | Murphy USA vs. LCI Industries | Murphy USA vs. Penske Automotive Group |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Stocks Directory Find actively traded stocks across global markets |