Correlation Between Citigroup and Otg Latin
Can any of the company-specific risk be diversified away by investing in both Citigroup and Otg Latin 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 Otg Latin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Otg Latin America, you can compare the effects of market volatilities on Citigroup and Otg Latin 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 Otg Latin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Otg Latin.
Diversification Opportunities for Citigroup and Otg Latin
Pay attention - limited upside
The 3 months correlation between Citigroup and Otg is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Otg Latin America in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Otg Latin America 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 Otg Latin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Otg Latin America has no effect on the direction of Citigroup i.e., Citigroup and Otg Latin go up and down completely randomly.
Pair Corralation between Citigroup and Otg Latin
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.88 times more return on investment than Otg Latin. However, Citigroup is 2.88 times more volatile than Otg Latin America. It trades about 0.32 of its potential returns per unit of risk. Otg Latin America is currently generating about -0.28 per unit of risk. If you would invest 6,235 in Citigroup on September 3, 2024 and sell it today you would earn a total of 852.00 from holding Citigroup or generate 13.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Otg Latin America
Performance |
| Timeline |
| Citigroup |
| Otg Latin America |
Citigroup and Otg Latin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Otg Latin
The main advantage of trading using opposite Citigroup and Otg Latin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Otg Latin 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 Otg Latin will offset losses from the drop in Otg Latin's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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