Correlation Between Consol Energy and Citigroup
Can any of the company-specific risk be diversified away by investing in both Consol Energy and Citigroup 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 Consol Energy and Citigroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Consol Energy and Citigroup, you can compare the effects of market volatilities on Consol Energy and Citigroup 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 Consol Energy with a short position of Citigroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Consol Energy and Citigroup.
Diversification Opportunities for Consol Energy and Citigroup
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Consol and Citigroup is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Consol Energy and Citigroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citigroup and Consol Energy 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 Consol Energy are associated (or correlated) with Citigroup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citigroup has no effect on the direction of Consol Energy i.e., Consol Energy and Citigroup go up and down completely randomly.
Pair Corralation between Consol Energy and Citigroup
Given the investment horizon of 90 days Consol Energy is expected to under-perform the Citigroup. In addition to that, Consol Energy is 1.02 times more volatile than Citigroup. It trades about -0.12 of its total potential returns per unit of risk. Citigroup is currently generating about 0.42 per unit of volatility. If you would invest 6,919 in Citigroup on October 21, 2024 and sell it today you would earn a total of 1,080 from holding Citigroup or generate 15.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 84.21% |
| Values | Daily Returns |
Consol Energy vs. Citigroup
Performance |
| Timeline |
| Consol Energy |
| Citigroup |
Consol Energy and Citigroup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Consol Energy and Citigroup
The main advantage of trading using opposite Consol Energy and Citigroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Consol Energy position performs unexpectedly, Citigroup 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 Citigroup will offset losses from the drop in Citigroup's long position.| Consol Energy vs. Alliance Resource Partners | Consol Energy vs. Natural Resource Partners | Consol Energy vs. Hallador Energy | Consol Energy vs. NACCO Industries |
| Citigroup vs. Bank of Montreal | Citigroup vs. Canadian Imperial Bank | Citigroup vs. Bank of Nova | Citigroup vs. JPMorgan Chase Co |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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