Correlation Between Citigroup and ARCA Oil
Can any of the company-specific risk be diversified away by investing in both Citigroup and ARCA Oil 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 ARCA Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and ARCA Oil, you can compare the effects of market volatilities on Citigroup and ARCA Oil 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 ARCA Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and ARCA Oil.
Diversification Opportunities for Citigroup and ARCA Oil
Good diversification
The 3 months correlation between Citigroup and ARCA is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and ARCA Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARCA Oil 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 ARCA Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARCA Oil has no effect on the direction of Citigroup i.e., Citigroup and ARCA Oil go up and down completely randomly.
Pair Corralation between Citigroup and ARCA Oil
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.63 times more return on investment than ARCA Oil. However, Citigroup is 1.63 times more volatile than ARCA Oil. It trades about 0.24 of its potential returns per unit of risk. ARCA Oil is currently generating about 0.02 per unit of risk. If you would invest 6,129 in Citigroup on October 21, 2024 and sell it today you would earn a total of 1,870 from holding Citigroup or generate 30.51% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Citigroup vs. ARCA Oil
Performance |
Timeline |
Citigroup and ARCA Oil Volatility Contrast
Predicted Return Density |
Returns |
Citigroup
Pair trading matchups for Citigroup
ARCA Oil
Pair trading matchups for ARCA Oil
Pair Trading with Citigroup and ARCA Oil
The main advantage of trading using opposite Citigroup and ARCA Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, ARCA Oil 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 ARCA Oil will offset losses from the drop in ARCA Oil's long position.Citigroup vs. Bank of Montreal | ||
Citigroup vs. Canadian Imperial Bank | ||
Citigroup vs. Bank of Nova | ||
Citigroup vs. JPMorgan Chase Co |
ARCA Oil vs. Tarsus Pharmaceuticals | ||
ARCA Oil vs. The Cheesecake Factory | ||
ARCA Oil vs. Regeneron Pharmaceuticals | ||
ARCA Oil vs. Portillos |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |