Correlation Between Citigroup and Oaktree (lux)

Can any of the company-specific risk be diversified away by investing in both Citigroup and Oaktree (lux) 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 Oaktree (lux) into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Citigroup and Oaktree Iii , you can compare the effects of market volatilities on Citigroup and Oaktree (lux) 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 Oaktree (lux). Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Oaktree (lux).

Diversification Opportunities for Citigroup and Oaktree (lux)

0.11

Correlation Coefficient

Citigroup  Oaktree (lux)

Average diversification

The 3 months correlation between Citigroup and Oaktree is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Oaktree Iii in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oaktree (lux) 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 Oaktree (lux). Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oaktree (lux) has no effect on the direction of Citigroup i.e., Citigroup and Oaktree (lux) go up and down completely randomly.

Pair Corralation between Citigroup and Oaktree (lux)

Taking into account the 90-day investment horizon Citigroup is expected to generate 21.97 times more return on investment than Oaktree (lux). However, Citigroup is 21.97 times more volatile than Oaktree Iii . It trades about 0.04 of its potential returns per unit of risk. Oaktree Iii is currently generating about 0.27 per unit of risk. If you would invest  6,929  in Citigroup on December 22, 2024 and sell it today you would earn a total of  269.00  from holding Citigroup or generate 3.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.72%
Values	Daily Returns

Citigroup  vs.  Oaktree Iii

Citigroup

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Citigroup is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Oaktree (lux)

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Oaktree Iii are ranked lower than 21 (%) of all funds and portfolios of funds over the last 90 days. Despite nearly stable basic indicators, Oaktree (lux) is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Citigroup and Oaktree (lux)

The main advantage of trading using opposite Citigroup and Oaktree (lux) positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Oaktree (lux) 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 Oaktree (lux) will offset losses from the drop in Oaktree (lux)'s long position.

The idea behind Citigroup and Oaktree Iii pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.