Correlation Between Citigroup and Oaktree Capital
Can any of the company-specific risk be diversified away by investing in both Citigroup and Oaktree Capital 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 Oaktree Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Oaktree Capital Group, you can compare the effects of market volatilities on Citigroup and Oaktree Capital 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 Oaktree Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Oaktree Capital.
Diversification Opportunities for Citigroup and Oaktree Capital
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Oaktree is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Oaktree Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oaktree Capital 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 Oaktree Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oaktree Capital Group has no effect on the direction of Citigroup i.e., Citigroup and Oaktree Capital go up and down completely randomly.
Pair Corralation between Citigroup and Oaktree Capital
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.3 times more return on investment than Oaktree Capital. However, Citigroup is 1.3 times more volatile than Oaktree Capital Group. It trades about 0.1 of its potential returns per unit of risk. Oaktree Capital Group is currently generating about 0.03 per unit of risk. If you would invest 4,164 in Citigroup on November 1, 2024 and sell it today you would earn a total of 4,022 from holding Citigroup or generate 96.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Oaktree Capital Group
Performance |
| Timeline |
| Citigroup |
| Oaktree Capital Group |
Citigroup and Oaktree Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Oaktree Capital
The main advantage of trading using opposite Citigroup and Oaktree Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Oaktree Capital 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 Oaktree Capital will offset losses from the drop in Oaktree Capital's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Oaktree Capital vs. The Gabelli Multimedia | Oaktree Capital vs. The Gabelli Equity | Oaktree Capital vs. Virtus AllianzGI Convertible | Oaktree Capital vs. Tri Continental PFD |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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