Correlation Between Citigroup and OceanPact Servios

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

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

Diversification Opportunities for Citigroup and OceanPact Servios

-0.55

Correlation Coefficient

Citigroup  OceanPact Servios

Excellent diversification

The 3 months correlation between Citigroup and OceanPact is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and OceanPact Servios Martimos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OceanPact Servios 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 OceanPact Servios. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OceanPact Servios has no effect on the direction of Citigroup i.e., Citigroup and OceanPact Servios go up and down completely randomly.

Pair Corralation between Citigroup and OceanPact Servios

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.77 times more return on investment than OceanPact Servios. However, Citigroup is 1.3 times less risky than OceanPact Servios. It trades about 0.09 of its potential returns per unit of risk. OceanPact Servios Martimos is currently generating about 0.0 per unit of risk. If you would invest  6,177  in Citigroup on October 25, 2024 and sell it today you would earn a total of  1,992  from holding Citigroup or generate 32.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.55%
Values	Daily Returns

Citigroup  vs.  OceanPact Servios Martimos

Citigroup

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 21 (%) 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.

OceanPact Servios

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days OceanPact Servios Martimos has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Citigroup and OceanPact Servios

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

The idea behind Citigroup and OceanPact Servios Martimos 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.