Correlation Between Citigroup and Williston Basin/mid-north

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

By analyzing existing cross correlation between Citigroup and Williston Basinmid North America, you can compare the effects of market volatilities on Citigroup and Williston Basin/mid-north 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 Williston Basin/mid-north. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Williston Basin/mid-north.

Diversification Opportunities for Citigroup and Williston Basin/mid-north

0.71

Correlation Coefficient

Citigroup  Williston Basin/mid-north

Poor diversification

The 3 months correlation between Citigroup and Williston is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Williston Basinmid North Ameri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Williston Basin/mid-north 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 Williston Basin/mid-north. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Williston Basin/mid-north has no effect on the direction of Citigroup i.e., Citigroup and Williston Basin/mid-north go up and down completely randomly.

Pair Corralation between Citigroup and Williston Basin/mid-north

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.25 times more return on investment than Williston Basin/mid-north. However, Citigroup is 1.25 times more volatile than Williston Basinmid North America. It trades about 0.06 of its potential returns per unit of risk. Williston Basinmid North America is currently generating about 0.03 per unit of risk. If you would invest  4,636  in Citigroup on October 7, 2024 and sell it today you would earn a total of  2,464  from holding Citigroup or generate 53.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Citigroup  vs.  Williston Basinmid North Ameri

Citigroup

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

Williston Basin/mid-north

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Williston Basinmid North America are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Williston Basin/mid-north is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Citigroup and Williston Basin/mid-north

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

The idea behind Citigroup and Williston Basinmid North America 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..