Correlation Between Citigroup and Odontoprev
Can any of the company-specific risk be diversified away by investing in both Citigroup and Odontoprev 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 Odontoprev into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Odontoprev SA, you can compare the effects of market volatilities on Citigroup and Odontoprev 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 Odontoprev. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Odontoprev.
Diversification Opportunities for Citigroup and Odontoprev
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Odontoprev is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Odontoprev SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Odontoprev SA 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 Odontoprev. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Odontoprev SA has no effect on the direction of Citigroup i.e., Citigroup and Odontoprev go up and down completely randomly.
Pair Corralation between Citigroup and Odontoprev
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.95 times more return on investment than Odontoprev. However, Citigroup is 1.05 times less risky than Odontoprev. It trades about 0.06 of its potential returns per unit of risk. Odontoprev SA is currently generating about -0.01 per unit of risk. If you would invest 6,131 in Citigroup on August 24, 2024 and sell it today you would earn a total of 764.00 from holding Citigroup or generate 12.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Citigroup vs. Odontoprev SA
Performance |
| Timeline |
| Citigroup |
| Odontoprev SA |
Citigroup and Odontoprev Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Odontoprev
The main advantage of trading using opposite Citigroup and Odontoprev positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Odontoprev 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 Odontoprev will offset losses from the drop in Odontoprev's long position.| Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Royal Bank of | Citigroup vs. JPMorgan Chase Co |
| Odontoprev vs. Natura Co Holding | Odontoprev vs. Raia Drogasil SA | Odontoprev vs. Qualicorp Consultoria e | Odontoprev vs. Localiza Rent a |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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