Correlation Between Citigroup and Opal Balance
Can any of the company-specific risk be diversified away by investing in both Citigroup and Opal Balance 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 Opal Balance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Opal Balance, you can compare the effects of market volatilities on Citigroup and Opal Balance 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 Opal Balance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Opal Balance.
Diversification Opportunities for Citigroup and Opal Balance
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and Opal is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Opal Balance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Opal Balance 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 Opal Balance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Opal Balance has no effect on the direction of Citigroup i.e., Citigroup and Opal Balance go up and down completely randomly.
Pair Corralation between Citigroup and Opal Balance
Taking into account the 90-day investment horizon Citigroup is expected to under-perform the Opal Balance. But the stock apears to be less risky and, when comparing its historical volatility, Citigroup is 1.13 times less risky than Opal Balance. The stock trades about -0.04 of its potential returns per unit of risk. The Opal Balance is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 22,150 in Opal Balance on December 1, 2024 and sell it today you would earn a total of 1,650 from holding Opal Balance or generate 7.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 85.71% |
| Values | Daily Returns |
Citigroup vs. Opal Balance
Performance |
| Timeline |
| Citigroup |
| Opal Balance |
Citigroup and Opal Balance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Opal Balance
The main advantage of trading using opposite Citigroup and Opal Balance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Opal Balance 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 Opal Balance will offset losses from the drop in Opal Balance's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Opal Balance vs. Nawi Brothers Group | Opal Balance vs. EN Shoham Business | Opal Balance vs. Peninsula Group | Opal Balance vs. Shikun Binui |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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