Correlation Between Citigroup and OMRON Corp
Can any of the company-specific risk be diversified away by investing in both Citigroup and OMRON Corp 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 OMRON Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and OMRON Corp ADR, you can compare the effects of market volatilities on Citigroup and OMRON Corp 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 OMRON Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and OMRON Corp.
Diversification Opportunities for Citigroup and OMRON Corp
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and OMRON is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and OMRON Corp ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OMRON Corp ADR 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 OMRON Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OMRON Corp ADR has no effect on the direction of Citigroup i.e., Citigroup and OMRON Corp go up and down completely randomly.
Pair Corralation between Citigroup and OMRON Corp
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.15 times more return on investment than OMRON Corp. However, Citigroup is 1.15 times more volatile than OMRON Corp ADR. It trades about 0.2 of its potential returns per unit of risk. OMRON Corp ADR is currently generating about -0.56 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 | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Citigroup vs. OMRON Corp ADR
Performance |
| Timeline |
| Citigroup |
| OMRON Corp ADR |
Citigroup and OMRON Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and OMRON Corp
The main advantage of trading using opposite Citigroup and OMRON Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, OMRON Corp 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 OMRON Corp will offset losses from the drop in OMRON Corp's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| OMRON Corp vs. Murata Manufacturing Co | OMRON Corp vs. LGL Group | OMRON Corp vs. Data IO | OMRON Corp vs. Bel Fuse 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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