Correlation Between Tamar Petroleum and Citigroup
Can any of the company-specific risk be diversified away by investing in both Tamar Petroleum and Citigroup 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 Tamar Petroleum and Citigroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tamar Petroleum and Citigroup, you can compare the effects of market volatilities on Tamar Petroleum and Citigroup 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 Tamar Petroleum with a short position of Citigroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tamar Petroleum and Citigroup.
Diversification Opportunities for Tamar Petroleum and Citigroup
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Tamar and Citigroup is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Tamar Petroleum and Citigroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citigroup and Tamar Petroleum 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 Tamar Petroleum are associated (or correlated) with Citigroup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citigroup has no effect on the direction of Tamar Petroleum i.e., Tamar Petroleum and Citigroup go up and down completely randomly.
Pair Corralation between Tamar Petroleum and Citigroup
Assuming the 90 days trading horizon Tamar Petroleum is expected to under-perform the Citigroup. In addition to that, Tamar Petroleum is 1.37 times more volatile than Citigroup. It trades about -0.17 of its total potential returns per unit of risk. Citigroup is currently generating about 0.05 per unit of volatility. If you would invest 6,166 in Citigroup on January 26, 2024 and sell it today you would earn a total of 81.00 from holding Citigroup or generate 1.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 76.19% |
| Values | Daily Returns |
Tamar Petroleum vs. Citigroup
Performance |
| Timeline |
| Tamar Petroleum |
| Citigroup |
Tamar Petroleum and Citigroup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tamar Petroleum and Citigroup
The main advantage of trading using opposite Tamar Petroleum and Citigroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tamar Petroleum position performs unexpectedly, Citigroup 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 Citigroup will offset losses from the drop in Citigroup's long position.| Tamar Petroleum vs. Delek Group | Tamar Petroleum vs. NewMed Energy | Tamar Petroleum vs. Fattal 1998 Holdings | Tamar Petroleum vs. Bazan Oil Refineries |
| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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