Correlation Between CITIGROUP CDR and Pine Cliff

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

By analyzing existing cross correlation between CITIGROUP CDR and Pine Cliff Energy, you can compare the effects of market volatilities on CITIGROUP CDR and Pine Cliff 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 CDR with a short position of Pine Cliff. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITIGROUP CDR and Pine Cliff.

Diversification Opportunities for CITIGROUP CDR and Pine Cliff

0.79

Correlation Coefficient

CITIGROUP CDR  Pine Cliff

Poor diversification

The 3 months correlation between CITIGROUP and Pine is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding CITIGROUP CDR and Pine Cliff Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pine Cliff Energy and CITIGROUP CDR 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 CDR are associated (or correlated) with Pine Cliff. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pine Cliff Energy has no effect on the direction of CITIGROUP CDR i.e., CITIGROUP CDR and Pine Cliff go up and down completely randomly.

Pair Corralation between CITIGROUP CDR and Pine Cliff

Assuming the 90 days trading horizon CITIGROUP CDR is expected to generate 1.01 times less return on investment than Pine Cliff. But when comparing it to its historical volatility, CITIGROUP CDR is 2.34 times less risky than Pine Cliff. It trades about 0.36 of its potential returns per unit of risk. Pine Cliff Energy is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  55.00  in Pine Cliff Energy on April 23, 2025 and sell it today you would earn a total of  20.00  from holding Pine Cliff Energy or generate 36.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

CITIGROUP CDR  vs.  Pine Cliff Energy

CITIGROUP CDR

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in CITIGROUP CDR are ranked lower than 28 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, CITIGROUP CDR exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pine Cliff Energy

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pine Cliff Energy are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, Pine Cliff displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CITIGROUP CDR and Pine Cliff

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

The idea behind CITIGROUP CDR and Pine Cliff Energy 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.