Correlation Between Citigroup and Athabasca Oil

Can any of the company-specific risk be diversified away by investing in both Citigroup and Athabasca 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 Athabasca Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Citigroup and Athabasca Oil Corp, you can compare the effects of market volatilities on Citigroup and Athabasca 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 Athabasca Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Athabasca Oil.

Diversification Opportunities for Citigroup and Athabasca Oil

-0.26

Correlation Coefficient

Citigroup  Athabasca Oil

Very good diversification

The 3 months correlation between Citigroup and Athabasca is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Athabasca Oil Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Athabasca Oil 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 Athabasca Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Athabasca Oil Corp has no effect on the direction of Citigroup i.e., Citigroup and Athabasca Oil go up and down completely randomly.

Pair Corralation between Citigroup and Athabasca Oil

Taking into account the 90-day investment horizon Citigroup is expected to generate 4.72 times less return on investment than Athabasca Oil. But when comparing it to its historical volatility, Citigroup is 1.18 times less risky than Athabasca Oil. It trades about 0.01 of its potential returns per unit of risk. Athabasca Oil Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  515.00  in Athabasca Oil Corp on December 30, 2024 and sell it today you would earn a total of  38.00  from holding Athabasca Oil Corp or generate 7.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.88%
Values	Daily Returns

Citigroup  vs.  Athabasca Oil Corp

Citigroup

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Citigroup is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Athabasca Oil Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Athabasca Oil Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical indicators, Athabasca Oil may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Citigroup and Athabasca Oil

The main advantage of trading using opposite Citigroup and Athabasca Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Athabasca 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 Athabasca Oil will offset losses from the drop in Athabasca Oil's long position.

The idea behind Citigroup and Athabasca Oil Corp 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.

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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.