Correlation Between Citigroup and Oppenheimer Rchster

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

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

Diversification Opportunities for Citigroup and Oppenheimer Rchster

0.36

Correlation Coefficient

Citigroup  Oppenheimer Rchster

Weak diversification

The 3 months correlation between Citigroup and Oppenheimer is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Oppenheimer Rchster Amt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer Rchster Amt 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 Oppenheimer Rchster. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oppenheimer Rchster Amt has no effect on the direction of Citigroup i.e., Citigroup and Oppenheimer Rchster go up and down completely randomly.

Pair Corralation between Citigroup and Oppenheimer Rchster

Taking into account the 90-day investment horizon Citigroup is expected to generate 6.25 times more return on investment than Oppenheimer Rchster. However, Citigroup is 6.25 times more volatile than Oppenheimer Rchster Amt. It trades about 0.01 of its potential returns per unit of risk. Oppenheimer Rchster Amt is currently generating about -0.08 per unit of risk. If you would invest  6,991  in Citigroup on December 30, 2024 and sell it today you would earn a total of  42.00  from holding Citigroup or generate 0.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Citigroup  vs.  Oppenheimer Rchster Amt

Citigroup

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 1 (%) 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 newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Oppenheimer Rchster Amt

Risk-Adjusted Performance

Very Weak

Over the last 90 days Oppenheimer Rchster Amt has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Oppenheimer Rchster is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Citigroup and Oppenheimer Rchster

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

The idea behind Citigroup and Oppenheimer Rchster Amt 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.