Correlation Between Citigroup and Ohio Valley
Can any of the company-specific risk be diversified away by investing in both Citigroup and Ohio Valley 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 Ohio Valley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Ohio Valley Banc, you can compare the effects of market volatilities on Citigroup and Ohio Valley 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 Ohio Valley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Ohio Valley.
Diversification Opportunities for Citigroup and Ohio Valley
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Ohio is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Ohio Valley Banc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ohio Valley Banc 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 Ohio Valley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ohio Valley Banc has no effect on the direction of Citigroup i.e., Citigroup and Ohio Valley go up and down completely randomly.
Pair Corralation between Citigroup and Ohio Valley
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.09 times less return on investment than Ohio Valley. But when comparing it to its historical volatility, Citigroup is 1.41 times less risky than Ohio Valley. It trades about 0.33 of its potential returns per unit of risk. Ohio Valley Banc is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 2,350 in Ohio Valley Banc on September 4, 2024 and sell it today you would earn a total of 363.00 from holding Ohio Valley Banc or generate 15.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Ohio Valley Banc
Performance |
| Timeline |
| Citigroup |
| Ohio Valley Banc |
Citigroup and Ohio Valley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Ohio Valley
The main advantage of trading using opposite Citigroup and Ohio Valley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Ohio Valley 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 Ohio Valley will offset losses from the drop in Ohio Valley's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Ohio Valley vs. International Bancshares | Ohio Valley vs. Finward Bancorp | Ohio Valley vs. Aquagold International | Ohio Valley vs. Thrivent High Yield |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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