Correlation Between Citigroup and Oceanic Beverages
Can any of the company-specific risk be diversified away by investing in both Citigroup and Oceanic Beverages 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 Oceanic Beverages into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Oceanic Beverages Co, you can compare the effects of market volatilities on Citigroup and Oceanic Beverages 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 Oceanic Beverages. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Oceanic Beverages.
Diversification Opportunities for Citigroup and Oceanic Beverages
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Citigroup and Oceanic is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Oceanic Beverages Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oceanic Beverages 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 Oceanic Beverages. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oceanic Beverages has no effect on the direction of Citigroup i.e., Citigroup and Oceanic Beverages go up and down completely randomly.
Pair Corralation between Citigroup and Oceanic Beverages
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.22 times more return on investment than Oceanic Beverages. However, Citigroup is 1.22 times more volatile than Oceanic Beverages Co. It trades about 0.26 of its potential returns per unit of risk. Oceanic Beverages Co is currently generating about 0.01 per unit of risk. If you would invest 6,361 in Citigroup on September 1, 2024 and sell it today you would earn a total of 726.00 from holding Citigroup or generate 11.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Citigroup vs. Oceanic Beverages Co
Performance |
| Timeline |
| Citigroup |
| Oceanic Beverages |
Citigroup and Oceanic Beverages Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Oceanic Beverages
The main advantage of trading using opposite Citigroup and Oceanic Beverages positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Oceanic Beverages 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 Oceanic Beverages will offset losses from the drop in Oceanic Beverages' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Oceanic Beverages vs. De Licacy Industrial | Oceanic Beverages vs. Wisher Industrial Co | Oceanic Beverages vs. Tainan Enterprises Co |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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