Correlation Between Citigroup and Obour Land

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

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

Diversification Opportunities for Citigroup and Obour Land

0.68

Correlation Coefficient

Citigroup  Obour Land

Poor diversification

The 3 months correlation between Citigroup and Obour is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Obour Land For in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Obour Land For 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 Obour Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Obour Land For has no effect on the direction of Citigroup i.e., Citigroup and Obour Land go up and down completely randomly.

Pair Corralation between Citigroup and Obour Land

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.91 times more return on investment than Obour Land. However, Citigroup is 1.1 times less risky than Obour Land. It trades about 0.04 of its potential returns per unit of risk. Obour Land For is currently generating about -0.06 per unit of risk. If you would invest  7,250  in Citigroup on October 11, 2024 and sell it today you would earn a total of  76.00  from holding Citigroup or generate 1.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	80.95%
Values	Daily Returns

Citigroup  vs.  Obour Land For

Citigroup

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

Obour Land For

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Obour Land For are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Obour Land reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and Obour Land

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

The idea behind Citigroup and Obour Land For 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.