Correlation Between Citigroup and Shell PLC
Can any of the company-specific risk be diversified away by investing in both Citigroup and Shell PLC 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 Shell PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Shell PLC, you can compare the effects of market volatilities on Citigroup and Shell PLC 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 Shell PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Shell PLC.
Diversification Opportunities for Citigroup and Shell PLC
Poor diversification
The 3 months correlation between Citigroup and Shell is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Shell PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shell PLC 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 Shell PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shell PLC has no effect on the direction of Citigroup i.e., Citigroup and Shell PLC go up and down completely randomly.
Pair Corralation between Citigroup and Shell PLC
Taking into account the 90-day investment horizon Citigroup is expected to under-perform the Shell PLC. In addition to that, Citigroup is 2.43 times more volatile than Shell PLC. It trades about -0.08 of its total potential returns per unit of risk. Shell PLC is currently generating about 0.19 per unit of volatility. If you would invest 3,151 in Shell PLC on December 4, 2024 and sell it today you would earn a total of 90.00 from holding Shell PLC or generate 2.86% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 95.24% |
Values | Daily Returns |
Citigroup vs. Shell PLC
Performance |
Timeline |
Citigroup |
Shell PLC |
Citigroup and Shell PLC Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Citigroup and Shell PLC
The main advantage of trading using opposite Citigroup and Shell PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Shell PLC 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 Shell PLC will offset losses from the drop in Shell PLC's long position.Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
Shell PLC vs. Koninklijke Ahold Delhaize | Shell PLC vs. Unilever PLC | Shell PLC vs. ING Groep NV | Shell PLC vs. ASML Holding NV |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |