Correlation Between Citigroup and Oconee Financial
Can any of the company-specific risk be diversified away by investing in both Citigroup and Oconee Financial 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 Oconee Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Oconee Financial, you can compare the effects of market volatilities on Citigroup and Oconee Financial 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 Oconee Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Oconee Financial.
Diversification Opportunities for Citigroup and Oconee Financial
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Citigroup and Oconee is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Oconee Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oconee Financial 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 Oconee Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oconee Financial has no effect on the direction of Citigroup i.e., Citigroup and Oconee Financial go up and down completely randomly.
Pair Corralation between Citigroup and Oconee Financial
Taking into account the 90-day investment horizon Citigroup is expected to generate 18.47 times more return on investment than Oconee Financial. However, Citigroup is 18.47 times more volatile than Oconee Financial. It trades about 0.29 of its potential returns per unit of risk. Oconee Financial is currently generating about 0.21 per unit of risk. If you would invest 6,122 in Citigroup on August 26, 2024 and sell it today you would earn a total of 862.00 from holding Citigroup or generate 14.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Oconee Financial
Performance |
| Timeline |
| Citigroup |
| Oconee Financial |
Citigroup and Oconee Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Oconee Financial
The main advantage of trading using opposite Citigroup and Oconee Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Oconee Financial 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 Oconee Financial will offset losses from the drop in Oconee Financial's long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
| Oconee Financial vs. PSB Holdings | Oconee Financial vs. United Overseas Bank | Oconee Financial vs. Turkiye Garanti Bankasi |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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