Correlation Between Citigroup and ENCANA
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By analyzing existing cross correlation between Citigroup and ENCANA P 6625, you can compare the effects of market volatilities on Citigroup and ENCANA 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 ENCANA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and ENCANA.
Diversification Opportunities for Citigroup and ENCANA
Very good diversification
The 3 months correlation between Citigroup and ENCANA is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and ENCANA P 6625 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENCANA P 6625 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 ENCANA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENCANA P 6625 has no effect on the direction of Citigroup i.e., Citigroup and ENCANA go up and down completely randomly.
Pair Corralation between Citigroup and ENCANA
Taking into account the 90-day investment horizon Citigroup is expected to generate 62.18 times less return on investment than ENCANA. But when comparing it to its historical volatility, Citigroup is 63.21 times less risky than ENCANA. It trades about 0.09 of its potential returns per unit of risk. ENCANA P 6625 is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 9,840 in ENCANA P 6625 on August 28, 2024 and sell it today you would earn a total of 355.00 from holding ENCANA P 6625 or generate 3.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 55.93% |
| Values | Daily Returns |
Citigroup vs. ENCANA P 6625
Performance |
| Timeline |
| Citigroup |
| ENCANA P 6625 |
Citigroup and ENCANA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and ENCANA
The main advantage of trading using opposite Citigroup and ENCANA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, ENCANA 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 ENCANA will offset losses from the drop in ENCANA's long position.The idea behind Citigroup and ENCANA P 6625 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| ENCANA vs. The Coca Cola | ENCANA vs. JPMorgan Chase Co | ENCANA vs. Dupont De Nemours | ENCANA vs. Alcoa Corp |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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