Correlation Between Citigroup and Orbit Technologies
Can any of the company-specific risk be diversified away by investing in both Citigroup and Orbit Technologies 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 Orbit Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Orbit Technologies, you can compare the effects of market volatilities on Citigroup and Orbit Technologies 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 Orbit Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Orbit Technologies.
Diversification Opportunities for Citigroup and Orbit Technologies
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and Orbit is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Orbit Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orbit Technologies 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 Orbit Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orbit Technologies has no effect on the direction of Citigroup i.e., Citigroup and Orbit Technologies go up and down completely randomly.
Pair Corralation between Citigroup and Orbit Technologies
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.08 times more return on investment than Orbit Technologies. However, Citigroup is 1.08 times more volatile than Orbit Technologies. It trades about 0.26 of its potential returns per unit of risk. Orbit Technologies is currently generating about 0.24 per unit of risk. If you would invest 6,361 in Citigroup on September 1, 2024 and sell it today you would earn a total of 726.00 from holding Citigroup or generate 11.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 85.71% |
| Values | Daily Returns |
Citigroup vs. Orbit Technologies
Performance |
| Timeline |
| Citigroup |
| Orbit Technologies |
Citigroup and Orbit Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Orbit Technologies
The main advantage of trading using opposite Citigroup and Orbit Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Orbit Technologies 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 Orbit Technologies will offset losses from the drop in Orbit Technologies' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Orbit Technologies vs. Arad | Orbit Technologies vs. Alony Hetz Properties | Orbit Technologies vs. Airport City | Orbit Technologies vs. Harel Insurance Investments |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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