Correlation Between Citigroup and Ratio Oil
Can any of the company-specific risk be diversified away by investing in both Citigroup and Ratio Oil 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 Ratio Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Ratio Oil Explorations, you can compare the effects of market volatilities on Citigroup and Ratio Oil 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 Ratio Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Ratio Oil.
Diversification Opportunities for Citigroup and Ratio Oil
Very poor diversification
The 3 months correlation between Citigroup and Ratio is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Ratio Oil Explorations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ratio Oil Explorations 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 Ratio Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ratio Oil Explorations has no effect on the direction of Citigroup i.e., Citigroup and Ratio Oil go up and down completely randomly.
Pair Corralation between Citigroup and Ratio Oil
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.75 times more return on investment than Ratio Oil. However, Citigroup is 1.75 times more volatile than Ratio Oil Explorations. It trades about 0.26 of its potential returns per unit of risk. Ratio Oil Explorations is currently generating about 0.41 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 Together |
| Strength | Strong |
| Accuracy | 85.71% |
| Values | Daily Returns |
Citigroup vs. Ratio Oil Explorations
Performance |
| Timeline |
| Citigroup |
| Ratio Oil Explorations |
Citigroup and Ratio Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Ratio Oil
The main advantage of trading using opposite Citigroup and Ratio Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Ratio Oil 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 Ratio Oil will offset losses from the drop in Ratio Oil's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Ratio Oil vs. Nice | Ratio Oil vs. The Gold Bond | Ratio Oil vs. Bank Leumi Le Israel | Ratio Oil vs. ICL Israel Chemicals |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| CEOs Directory Screen CEOs from public companies around the world |