Correlation Between Citigroup and Orogen Royalties
Can any of the company-specific risk be diversified away by investing in both Citigroup and Orogen Royalties 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 Orogen Royalties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Orogen Royalties, you can compare the effects of market volatilities on Citigroup and Orogen Royalties 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 Orogen Royalties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Orogen Royalties.
Diversification Opportunities for Citigroup and Orogen Royalties
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and Orogen is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Orogen Royalties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orogen Royalties 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 Orogen Royalties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orogen Royalties has no effect on the direction of Citigroup i.e., Citigroup and Orogen Royalties go up and down completely randomly.
Pair Corralation between Citigroup and Orogen Royalties
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.49 times more return on investment than Orogen Royalties. However, Citigroup is 2.04 times less risky than Orogen Royalties. It trades about 0.2 of its potential returns per unit of risk. Orogen Royalties is currently generating about -0.09 per unit of risk. If you would invest 6,412 in Citigroup on August 30, 2024 and sell it today you would earn a total of 604.00 from holding Citigroup or generate 9.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Orogen Royalties
Performance |
| Timeline |
| Citigroup |
| Orogen Royalties |
Citigroup and Orogen Royalties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Orogen Royalties
The main advantage of trading using opposite Citigroup and Orogen Royalties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Orogen Royalties 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 Orogen Royalties will offset losses from the drop in Orogen Royalties' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Orogen Royalties vs. Precipitate Gold Corp | Orogen Royalties vs. Sailfish Royalty Corp | Orogen Royalties vs. Hummingbird Resources PLC | Orogen Royalties vs. Almadex Minerals |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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