Correlation Between Citigroup and Ouster, Warrants

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

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

Diversification Opportunities for Citigroup and Ouster, Warrants

0.22

Correlation Coefficient

Citigroup  Ouster, Warrants

Modest diversification

The 3 months correlation between Citigroup and Ouster, is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Ouster, Warrants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ouster, Warrants 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 Ouster, Warrants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ouster, Warrants has no effect on the direction of Citigroup i.e., Citigroup and Ouster, Warrants go up and down completely randomly.

Pair Corralation between Citigroup and Ouster, Warrants

Taking into account the 90-day investment horizon Citigroup is expected to generate 5.34 times less return on investment than Ouster, Warrants. But when comparing it to its historical volatility, Citigroup is 7.26 times less risky than Ouster, Warrants. It trades about 0.04 of its potential returns per unit of risk. Ouster, Warrants is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  10.00  in Ouster, Warrants on December 21, 2024 and sell it today you would lose (3.00) from holding Ouster, Warrants or give up 30.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.61%
Values	Daily Returns

Citigroup  vs.  Ouster, Warrants

Citigroup

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 3 (%) 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 recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Ouster, Warrants

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ouster, Warrants are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Ouster, Warrants showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and Ouster, Warrants

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

The idea behind Citigroup and Ouster, Warrants 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.