Correlation Between Citigroup and Savoy Energy
Can any of the company-specific risk be diversified away by investing in both Citigroup and Savoy 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 Savoy Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Savoy Energy Corp, you can compare the effects of market volatilities on Citigroup and Savoy 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 Savoy Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Savoy Energy.
Diversification Opportunities for Citigroup and Savoy Energy
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and Savoy is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Savoy Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Savoy Energy 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 Savoy Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Savoy Energy Corp has no effect on the direction of Citigroup i.e., Citigroup and Savoy Energy go up and down completely randomly.
Pair Corralation between Citigroup and Savoy Energy
If you would invest 4,959 in Citigroup on September 24, 2024 and sell it today you would earn a total of 1,960 from holding Citigroup or generate 39.52% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 99.6% |
Values | Daily Returns |
Citigroup vs. Savoy Energy Corp
Performance |
Timeline |
Citigroup |
Savoy Energy Corp |
Citigroup and Savoy Energy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Citigroup and Savoy Energy
The main advantage of trading using opposite Citigroup and Savoy Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Savoy 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 Savoy Energy will offset losses from the drop in Savoy Energy's long position.The idea behind Citigroup and Savoy Energy 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.Savoy Energy vs. Ecopetrol SA ADR | Savoy Energy vs. National Fuel Gas | Savoy Energy vs. Transportadora de Gas | Savoy Energy vs. Petrleo Brasileiro SA |
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 Positions Ratings module to 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.
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