Correlation Between Citigroup and Odyssee Technologies

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

By analyzing existing cross correlation between Citigroup and Odyssee Technologies SA, you can compare the effects of market volatilities on Citigroup and Odyssee Technologies 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 Odyssee Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Odyssee Technologies.

Diversification Opportunities for Citigroup and Odyssee Technologies

0.25

Correlation Coefficient

Citigroup  Odyssee Technologies

Modest diversification

The 3 months correlation between Citigroup and Odyssee is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Odyssee Technologies SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Odyssee Technologies 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 Odyssee Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Odyssee Technologies has no effect on the direction of Citigroup i.e., Citigroup and Odyssee Technologies go up and down completely randomly.

Pair Corralation between Citigroup and Odyssee Technologies

Taking into account the 90-day investment horizon Citigroup is expected to generate 4.68 times less return on investment than Odyssee Technologies. But when comparing it to its historical volatility, Citigroup is 1.27 times less risky than Odyssee Technologies. It trades about 0.04 of its potential returns per unit of risk. Odyssee Technologies SA is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  1,436  in Odyssee Technologies SA on December 23, 2024 and sell it today you would earn a total of  354.00  from holding Odyssee Technologies SA or generate 24.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.83%
Values	Daily Returns

Citigroup  vs.  Odyssee Technologies SA

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.

Odyssee Technologies

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Odyssee Technologies SA are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Odyssee Technologies reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and Odyssee Technologies

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

The idea behind Citigroup and Odyssee Technologies SA 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.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.