Correlation Between Citigroup and Ohio Variable
Can any of the company-specific risk be diversified away by investing in both Citigroup and Ohio Variable 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 Ohio Variable into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Ohio Variable College, you can compare the effects of market volatilities on Citigroup and Ohio Variable 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 Ohio Variable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Ohio Variable.
Diversification Opportunities for Citigroup and Ohio Variable
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Ohio is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Ohio Variable College in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ohio Variable College 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 Ohio Variable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ohio Variable College has no effect on the direction of Citigroup i.e., Citigroup and Ohio Variable go up and down completely randomly.
Pair Corralation between Citigroup and Ohio Variable
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.78 times more return on investment than Ohio Variable. However, Citigroup is 2.78 times more volatile than Ohio Variable College. It trades about 0.11 of its potential returns per unit of risk. Ohio Variable College is currently generating about 0.13 per unit of risk. If you would invest 4,642 in Citigroup on September 4, 2024 and sell it today you would earn a total of 2,497 from holding Citigroup or generate 53.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Citigroup vs. Ohio Variable College
Performance |
| Timeline |
| Citigroup |
| Ohio Variable College |
Citigroup and Ohio Variable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Ohio Variable
The main advantage of trading using opposite Citigroup and Ohio Variable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Ohio Variable 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 Ohio Variable will offset losses from the drop in Ohio Variable's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Ohio Variable vs. Vanguard Total Stock | Ohio Variable vs. Vanguard 500 Index | Ohio Variable vs. Vanguard Total Stock | Ohio Variable vs. Vanguard Total Stock |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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