Correlation Between Citigroup and TBS Energi
Can any of the company-specific risk be diversified away by investing in both Citigroup and TBS Energi 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 TBS Energi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and TBS Energi Utama, you can compare the effects of market volatilities on Citigroup and TBS Energi 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 TBS Energi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and TBS Energi.
Diversification Opportunities for Citigroup and TBS Energi
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Citigroup and TBS is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and TBS Energi Utama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TBS Energi Utama 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 TBS Energi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TBS Energi Utama has no effect on the direction of Citigroup i.e., Citigroup and TBS Energi go up and down completely randomly.
Pair Corralation between Citigroup and TBS Energi
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.48 times more return on investment than TBS Energi. However, Citigroup is 2.09 times less risky than TBS Energi. It trades about 0.21 of its potential returns per unit of risk. TBS Energi Utama is currently generating about -0.19 per unit of risk. If you would invest 6,412 in Citigroup on August 30, 2024 and sell it today you would earn a total of 604.00 from holding Citigroup or generate 9.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. TBS Energi Utama
Performance |
| Timeline |
| Citigroup |
| TBS Energi Utama |
Citigroup and TBS Energi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and TBS Energi
The main advantage of trading using opposite Citigroup and TBS Energi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, TBS Energi 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 TBS Energi will offset losses from the drop in TBS Energi's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| TBS Energi vs. Golden Eagle Energy | TBS Energi vs. Baramulti Suksessarana Tbk | TBS Energi vs. Samindo Resources Tbk | TBS Energi vs. Resource Alam Indonesia |
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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