Correlation Between Citigroup and Thai Oil
Can any of the company-specific risk be diversified away by investing in both Citigroup and Thai 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 Thai Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Thai Oil Public, you can compare the effects of market volatilities on Citigroup and Thai 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 Thai Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Thai Oil.
Diversification Opportunities for Citigroup and Thai Oil
Pay attention - limited upside
The 3 months correlation between Citigroup and Thai is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Thai Oil Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Oil Public 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 Thai Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Oil Public has no effect on the direction of Citigroup i.e., Citigroup and Thai Oil go up and down completely randomly.
Pair Corralation between Citigroup and Thai Oil
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.0 times more return on investment than Thai Oil. However, Citigroup is 1.0 times less risky than Thai Oil. It trades about 0.06 of its potential returns per unit of risk. Thai Oil Public is currently generating about -0.07 per unit of risk. If you would invest 6,131 in Citigroup on August 25, 2024 and sell it today you would earn a total of 853.00 from holding Citigroup or generate 13.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 98.43% |
| Values | Daily Returns |
Citigroup vs. Thai Oil Public
Performance |
| Timeline |
| Citigroup |
| Thai Oil Public |
Citigroup and Thai Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Thai Oil
The main advantage of trading using opposite Citigroup and Thai Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Thai 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 Thai Oil will offset losses from the drop in Thai Oil's long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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