Correlation Between Citigroup and WOODSIDE ENE
Can any of the company-specific risk be diversified away by investing in both Citigroup and WOODSIDE ENE 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 WOODSIDE ENE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and WOODSIDE ENE SPADR, you can compare the effects of market volatilities on Citigroup and WOODSIDE ENE 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 WOODSIDE ENE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and WOODSIDE ENE.
Diversification Opportunities for Citigroup and WOODSIDE ENE
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and WOODSIDE is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and WOODSIDE ENE SPADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WOODSIDE ENE SPADR 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 WOODSIDE ENE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WOODSIDE ENE SPADR has no effect on the direction of Citigroup i.e., Citigroup and WOODSIDE ENE go up and down completely randomly.
Pair Corralation between Citigroup and WOODSIDE ENE
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.58 times more return on investment than WOODSIDE ENE. However, Citigroup is 1.74 times less risky than WOODSIDE ENE. It trades about 0.1 of its potential returns per unit of risk. WOODSIDE ENE SPADR is currently generating about 0.01 per unit of risk. If you would invest 6,203 in Citigroup on September 23, 2024 and sell it today you would earn a total of 716.00 from holding Citigroup or generate 11.54% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 98.48% |
Values | Daily Returns |
Citigroup vs. WOODSIDE ENE SPADR
Performance |
Timeline |
Citigroup |
WOODSIDE ENE SPADR |
Citigroup and WOODSIDE ENE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Citigroup and WOODSIDE ENE
The main advantage of trading using opposite Citigroup and WOODSIDE ENE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, WOODSIDE ENE 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 WOODSIDE ENE will offset losses from the drop in WOODSIDE ENE's long position.Citigroup vs. Toronto Dominion Bank | ||
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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