Correlation Between Citigroup and Turcas Petrol

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

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

Diversification Opportunities for Citigroup and Turcas Petrol

0.47

Correlation Coefficient

Citigroup  Turcas Petrol

Very weak diversification

The 3 months correlation between Citigroup and Turcas is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Turcas Petrol AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turcas Petrol AS 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 Turcas Petrol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Turcas Petrol AS has no effect on the direction of Citigroup i.e., Citigroup and Turcas Petrol go up and down completely randomly.

Pair Corralation between Citigroup and Turcas Petrol

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.57 times more return on investment than Turcas Petrol. However, Citigroup is 1.76 times less risky than Turcas Petrol. It trades about 0.11 of its potential returns per unit of risk. Turcas Petrol AS is currently generating about 0.04 per unit of risk. If you would invest  4,325  in Citigroup on September 23, 2024 and sell it today you would earn a total of  2,594  from holding Citigroup or generate 59.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.26%
Values	Daily Returns

Citigroup  vs.  Turcas Petrol AS

Citigroup

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Citigroup may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Turcas Petrol AS

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Turcas Petrol AS are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Turcas Petrol may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Citigroup and Turcas Petrol

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

The idea behind Citigroup and Turcas Petrol AS 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.