Correlation Between Citigroup and Ovid Therapeutics
Can any of the company-specific risk be diversified away by investing in both Citigroup and Ovid Therapeutics 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 Ovid Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Ovid Therapeutics, you can compare the effects of market volatilities on Citigroup and Ovid Therapeutics 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 Ovid Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Ovid Therapeutics.
Diversification Opportunities for Citigroup and Ovid Therapeutics
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Citigroup and Ovid is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Ovid Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ovid Therapeutics 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 Ovid Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ovid Therapeutics has no effect on the direction of Citigroup i.e., Citigroup and Ovid Therapeutics go up and down completely randomly.
Pair Corralation between Citigroup and Ovid Therapeutics
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.61 times more return on investment than Ovid Therapeutics. However, Citigroup is 1.63 times less risky than Ovid Therapeutics. It trades about 0.24 of its potential returns per unit of risk. Ovid Therapeutics is currently generating about -0.15 per unit of risk. If you would invest 6,245 in Citigroup on August 25, 2024 and sell it today you would earn a total of 739.00 from holding Citigroup or generate 11.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Citigroup vs. Ovid Therapeutics
Performance |
| Timeline |
| Citigroup |
| Ovid Therapeutics |
Citigroup and Ovid Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Ovid Therapeutics
The main advantage of trading using opposite Citigroup and Ovid Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Ovid Therapeutics 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 Ovid Therapeutics will offset losses from the drop in Ovid Therapeutics' long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Canadian Imperial Bank |
| Ovid Therapeutics vs. CytomX Therapeutics | Ovid Therapeutics vs. Spero Therapeutics | Ovid Therapeutics vs. Instil Bio | Ovid Therapeutics vs. NextCure |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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