Correlation Between Citigroup and Stampede Drilling
Can any of the company-specific risk be diversified away by investing in both Citigroup and Stampede Drilling 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 Stampede Drilling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Stampede Drilling, you can compare the effects of market volatilities on Citigroup and Stampede Drilling 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 Stampede Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Stampede Drilling.
Diversification Opportunities for Citigroup and Stampede Drilling
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Stampede is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Stampede Drilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stampede Drilling 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 Stampede Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stampede Drilling has no effect on the direction of Citigroup i.e., Citigroup and Stampede Drilling go up and down completely randomly.
Pair Corralation between Citigroup and Stampede Drilling
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.49 times more return on investment than Stampede Drilling. However, Citigroup is 2.05 times less risky than Stampede Drilling. It trades about 0.07 of its potential returns per unit of risk. Stampede Drilling is currently generating about -0.01 per unit of risk. If you would invest 4,134 in Citigroup on August 30, 2024 and sell it today you would earn a total of 2,882 from holding Citigroup or generate 69.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Citigroup vs. Stampede Drilling
Performance |
| Timeline |
| Citigroup |
| Stampede Drilling |
Citigroup and Stampede Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Stampede Drilling
The main advantage of trading using opposite Citigroup and Stampede Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Stampede Drilling 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 Stampede Drilling will offset losses from the drop in Stampede Drilling's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Stampede Drilling vs. Canadian Natural Resources | Stampede Drilling vs. Suncor Energy | Stampede Drilling vs. iShares Canadian HYBrid | Stampede Drilling vs. Altagas Cum Red |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |