Correlation Between Citigroup and Octagonal Plc

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

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

Diversification Opportunities for Citigroup and Octagonal Plc

0.0

Correlation Coefficient

Citigroup  Octagonal Plc

Pay attention - limited upside

The 3 months correlation between Citigroup and Octagonal is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Octagonal Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Octagonal Plc 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 Octagonal Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Octagonal Plc has no effect on the direction of Citigroup i.e., Citigroup and Octagonal Plc go up and down completely randomly.

Pair Corralation between Citigroup and Octagonal Plc

If you would invest  6,361  in Citigroup on October 1, 2024 and sell it today you would earn a total of  739.00  from holding Citigroup or generate 11.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Citigroup  vs.  Octagonal Plc

Citigroup

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

Octagonal Plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Octagonal Plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Octagonal Plc is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Citigroup and Octagonal Plc

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

The idea behind Citigroup and Octagonal Plc 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.