Correlation Between Citigroup and Omega Therapeutics
Can any of the company-specific risk be diversified away by investing in both Citigroup and Omega Therapeutics 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 Omega Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Omega Therapeutics, you can compare the effects of market volatilities on Citigroup and Omega Therapeutics 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 Omega Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Omega Therapeutics.
Diversification Opportunities for Citigroup and Omega Therapeutics
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and Omega is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Omega Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omega Therapeutics 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 Omega Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omega Therapeutics has no effect on the direction of Citigroup i.e., Citigroup and Omega Therapeutics go up and down completely randomly.
Pair Corralation between Citigroup and Omega Therapeutics
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.31 times more return on investment than Omega Therapeutics. However, Citigroup is 3.21 times less risky than Omega Therapeutics. It trades about 0.08 of its potential returns per unit of risk. Omega Therapeutics is currently generating about -0.07 per unit of risk. If you would invest 5,992 in Citigroup on September 2, 2024 and sell it today you would earn a total of 1,095 from holding Citigroup or generate 18.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Omega Therapeutics
Performance |
| Timeline |
| Citigroup |
| Omega Therapeutics |
Citigroup and Omega Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Omega Therapeutics
The main advantage of trading using opposite Citigroup and Omega Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Omega Therapeutics 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 Omega Therapeutics will offset losses from the drop in Omega Therapeutics' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Omega Therapeutics vs. Pmv Pharmaceuticals | Omega Therapeutics vs. Eliem Therapeutics | Omega Therapeutics vs. MediciNova | Omega Therapeutics vs. Pharvaris BV |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Stocks Directory Find actively traded stocks across global markets | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |