Correlation Between Citigroup and Seapeak LLC
Can any of the company-specific risk be diversified away by investing in both Citigroup and Seapeak LLC 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 Seapeak LLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Seapeak LLC, you can compare the effects of market volatilities on Citigroup and Seapeak LLC 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 Seapeak LLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Seapeak LLC.
Diversification Opportunities for Citigroup and Seapeak LLC
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citigroup and Seapeak is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Seapeak LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seapeak LLC 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 Seapeak LLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seapeak LLC has no effect on the direction of Citigroup i.e., Citigroup and Seapeak LLC go up and down completely randomly.
Pair Corralation between Citigroup and Seapeak LLC
Taking into account the 90-day investment horizon Citigroup is expected to generate 3.19 times more return on investment than Seapeak LLC. However, Citigroup is 3.19 times more volatile than Seapeak LLC. It trades about 0.09 of its potential returns per unit of risk. Seapeak LLC is currently generating about 0.07 per unit of risk. If you would invest 5,114 in Citigroup on September 27, 2024 and sell it today you would earn a total of 1,986 from holding Citigroup or generate 38.83% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 99.6% |
Values | Daily Returns |
Citigroup vs. Seapeak LLC
Performance |
Timeline |
Citigroup |
Seapeak LLC |
Citigroup and Seapeak LLC Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Citigroup and Seapeak LLC
The main advantage of trading using opposite Citigroup and Seapeak LLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Seapeak LLC 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 Seapeak LLC will offset losses from the drop in Seapeak LLC's long position.The idea behind Citigroup and Seapeak LLC 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.Seapeak LLC vs. Antero Midstream Partners | Seapeak LLC vs. Excelerate Energy | Seapeak LLC vs. Energy Transfer LP | Seapeak LLC vs. Teekay |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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