Correlation Between Citigroup and Rock Oak
Can any of the company-specific risk be diversified away by investing in both Citigroup and Rock Oak 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 Rock Oak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Rock Oak E, you can compare the effects of market volatilities on Citigroup and Rock Oak 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 Rock Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Rock Oak.
Diversification Opportunities for Citigroup and Rock Oak
Almost no diversification
The 3 months correlation between Citigroup and Rock is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Rock Oak E in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rock Oak E 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 Rock Oak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rock Oak E has no effect on the direction of Citigroup i.e., Citigroup and Rock Oak go up and down completely randomly.
Pair Corralation between Citigroup and Rock Oak
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.98 times more return on investment than Rock Oak. However, Citigroup is 1.98 times more volatile than Rock Oak E. It trades about 0.25 of its potential returns per unit of risk. Rock Oak E is currently generating about 0.36 per unit of risk. If you would invest 6,360 in Citigroup on August 28, 2024 and sell it today you would earn a total of 715.00 from holding Citigroup or generate 11.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Rock Oak E
Performance |
| Timeline |
| Citigroup |
| Rock Oak E |
Citigroup and Rock Oak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Rock Oak
The main advantage of trading using opposite Citigroup and Rock Oak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Rock Oak 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 Rock Oak will offset losses from the drop in Rock Oak's long position.| Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
| Rock Oak vs. Live Oak Health | Rock Oak vs. River Oak Discovery | Rock Oak vs. Black Oak Emerging | Rock Oak vs. Pin Oak Equity |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |