Correlation Between Citigroup and Bristow
Can any of the company-specific risk be diversified away by investing in both Citigroup and Bristow 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 Bristow into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Bristow Group, you can compare the effects of market volatilities on Citigroup and Bristow 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 Bristow. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Bristow.
Diversification Opportunities for Citigroup and Bristow
Very poor diversification
The 3 months correlation between Citigroup and Bristow is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Bristow Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bristow Group 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 Bristow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bristow Group has no effect on the direction of Citigroup i.e., Citigroup and Bristow go up and down completely randomly.
Pair Corralation between Citigroup and Bristow
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.75 times more return on investment than Bristow. However, Citigroup is 1.33 times less risky than Bristow. It trades about 0.38 of its potential returns per unit of risk. Bristow Group is currently generating about 0.19 per unit of risk. If you would invest 6,784 in Citigroup on April 30, 2025 and sell it today you would earn a total of 2,771 from holding Citigroup or generate 40.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Bristow Group
Performance |
| Timeline |
| Citigroup |
| Bristow Group |
Citigroup and Bristow Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Bristow
The main advantage of trading using opposite Citigroup and Bristow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Bristow 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 Bristow will offset losses from the drop in Bristow's long position.The idea behind Citigroup and Bristow Group 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.| Bristow vs. Expro Group Holdings | Bristow vs. Ranger Energy Services | Bristow vs. Cactus Inc | Bristow vs. MRC Global |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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