Correlation Between Citigroup and Oakmark Fund
Can any of the company-specific risk be diversified away by investing in both Citigroup and Oakmark Fund 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 Oakmark Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Oakmark Fund R6, you can compare the effects of market volatilities on Citigroup and Oakmark Fund 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 Oakmark Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Oakmark Fund.
Diversification Opportunities for Citigroup and Oakmark Fund
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Citigroup and Oakmark is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Oakmark Fund R6 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakmark Fund R6 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 Oakmark Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oakmark Fund R6 has no effect on the direction of Citigroup i.e., Citigroup and Oakmark Fund go up and down completely randomly.
Pair Corralation between Citigroup and Oakmark Fund
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.73 times more return on investment than Oakmark Fund. However, Citigroup is 1.73 times more volatile than Oakmark Fund R6. It trades about 0.07 of its potential returns per unit of risk. Oakmark Fund R6 is currently generating about 0.1 per unit of risk. If you would invest 4,134 in Citigroup on August 30, 2024 and sell it today you would earn a total of 2,882 from holding Citigroup or generate 69.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Oakmark Fund R6
Performance |
| Timeline |
| Citigroup |
| Oakmark Fund R6 |
Citigroup and Oakmark Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Oakmark Fund
The main advantage of trading using opposite Citigroup and Oakmark Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Oakmark Fund 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 Oakmark Fund will offset losses from the drop in Oakmark Fund's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Oakmark Fund vs. Dodge Cox Stock | Oakmark Fund vs. American Mutual Fund | Oakmark Fund vs. American Funds American | Oakmark Fund vs. American Funds American |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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