Correlation Between Citigroup and Gulfport Energy

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

By analyzing existing cross correlation between Citigroup and Gulfport Energy Operating, you can compare the effects of market volatilities on Citigroup and Gulfport Energy 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 Gulfport Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Gulfport Energy.

Diversification Opportunities for Citigroup and Gulfport Energy

-0.44

Correlation Coefficient

Citigroup  Gulfport Energy

Very good diversification

The 3 months correlation between Citigroup and Gulfport is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Gulfport Energy Operating in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gulfport Energy Operating 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 Gulfport Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gulfport Energy Operating has no effect on the direction of Citigroup i.e., Citigroup and Gulfport Energy go up and down completely randomly.

Pair Corralation between Citigroup and Gulfport Energy

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.66 times more return on investment than Gulfport Energy. However, Citigroup is 1.51 times less risky than Gulfport Energy. It trades about 0.29 of its potential returns per unit of risk. Gulfport Energy Operating is currently generating about -0.04 per unit of risk. If you would invest  7,024  in Citigroup on May 5, 2025 and sell it today you would earn a total of  2,159  from holding Citigroup or generate 30.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Citigroup  vs.  Gulfport Energy Operating

Citigroup

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

Gulfport Energy Operating

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gulfport Energy Operating has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Gulfport Energy is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Citigroup and Gulfport Energy

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

The idea behind Citigroup and Gulfport Energy Operating 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.