Correlation Between Citigroup and Sable Offshore
Can any of the company-specific risk be diversified away by investing in both Citigroup and Sable Offshore 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 Sable Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Sable Offshore Corp, you can compare the effects of market volatilities on Citigroup and Sable Offshore 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 Sable Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Sable Offshore.
Diversification Opportunities for Citigroup and Sable Offshore
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Citigroup and Sable is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Sable Offshore Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sable Offshore Corp 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 Sable Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sable Offshore Corp has no effect on the direction of Citigroup i.e., Citigroup and Sable Offshore go up and down completely randomly.
Pair Corralation between Citigroup and Sable Offshore
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.93 times less return on investment than Sable Offshore. But when comparing it to its historical volatility, Citigroup is 1.86 times less risky than Sable Offshore. It trades about 0.07 of its potential returns per unit of risk. Sable Offshore Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,009 in Sable Offshore Corp on August 27, 2024 and sell it today you would earn a total of 1,399 from holding Sable Offshore Corp or generate 138.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.56% |
| Values | Daily Returns |
Citigroup vs. Sable Offshore Corp
Performance |
| Timeline |
| Citigroup |
| Sable Offshore Corp |
Citigroup and Sable Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Sable Offshore
The main advantage of trading using opposite Citigroup and Sable Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Sable Offshore 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 Sable Offshore will offset losses from the drop in Sable Offshore's long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
| Sable Offshore vs. Helmerich and Payne | Sable Offshore vs. Noble plc | Sable Offshore vs. Nabors Industries | Sable Offshore vs. Precision Drilling |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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