Correlation Between Citigroup and Kunlun Energy

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

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

Diversification Opportunities for Citigroup and Kunlun Energy

0.23

Correlation Coefficient

Citigroup  Kunlun Energy

Modest diversification

The 3 months correlation between Citigroup and Kunlun is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Kunlun Energy Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kunlun Energy 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 Kunlun Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kunlun Energy has no effect on the direction of Citigroup i.e., Citigroup and Kunlun Energy go up and down completely randomly.

Pair Corralation between Citigroup and Kunlun Energy

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.27 times more return on investment than Kunlun Energy. However, Citigroup is 3.68 times less risky than Kunlun Energy. It trades about 0.07 of its potential returns per unit of risk. Kunlun Energy Co is currently generating about -0.05 per unit of risk. If you would invest  7,196  in Citigroup on October 12, 2024 and sell it today you would earn a total of  130.00  from holding Citigroup or generate 1.81% return on investment over 90 days.

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

Citigroup  vs.  Kunlun Energy Co

Citigroup

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

Kunlun Energy

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kunlun Energy Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile fundamental indicators, Kunlun Energy may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Citigroup and Kunlun Energy

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

The idea behind Citigroup and Kunlun Energy Co 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.