Correlation Between Citigroup and OSRAM LICHT
Can any of the company-specific risk be diversified away by investing in both Citigroup and OSRAM LICHT 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 OSRAM LICHT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and OSRAM LICHT N, you can compare the effects of market volatilities on Citigroup and OSRAM LICHT 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 OSRAM LICHT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and OSRAM LICHT.
Diversification Opportunities for Citigroup and OSRAM LICHT
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Citigroup and OSRAM is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and OSRAM LICHT N in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OSRAM LICHT N 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 OSRAM LICHT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OSRAM LICHT N has no effect on the direction of Citigroup i.e., Citigroup and OSRAM LICHT go up and down completely randomly.
Pair Corralation between Citigroup and OSRAM LICHT
Taking into account the 90-day investment horizon Citigroup is expected to under-perform the OSRAM LICHT. In addition to that, Citigroup is 4.14 times more volatile than OSRAM LICHT N. It trades about -0.03 of its total potential returns per unit of risk. OSRAM LICHT N is currently generating about 0.12 per unit of volatility. If you would invest 5,140 in OSRAM LICHT N on September 23, 2024 and sell it today you would earn a total of 40.00 from holding OSRAM LICHT N or generate 0.78% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 95.45% |
Values | Daily Returns |
Citigroup vs. OSRAM LICHT N
Performance |
Timeline |
Citigroup |
OSRAM LICHT N |
Citigroup and OSRAM LICHT Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Citigroup and OSRAM LICHT
The main advantage of trading using opposite Citigroup and OSRAM LICHT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, OSRAM LICHT 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 OSRAM LICHT will offset losses from the drop in OSRAM LICHT's long position.Citigroup vs. Nu Holdings | Citigroup vs. Canadian Imperial Bank | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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