Correlation Between Onxeo SA and Citigroup

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

By analyzing existing cross correlation between Onxeo SA and Citigroup, you can compare the effects of market volatilities on Onxeo SA and Citigroup 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 Onxeo SA with a short position of Citigroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Onxeo SA and Citigroup.

Diversification Opportunities for Onxeo SA and Citigroup

-0.66

Correlation Coefficient

Onxeo SA  Citigroup

Excellent diversification

The 3 months correlation between Onxeo and Citigroup is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Onxeo SA and Citigroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citigroup and Onxeo SA 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 Onxeo SA are associated (or correlated) with Citigroup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citigroup has no effect on the direction of Onxeo SA i.e., Onxeo SA and Citigroup go up and down completely randomly.

Pair Corralation between Onxeo SA and Citigroup

Assuming the 90 days horizon Onxeo SA is expected to under-perform the Citigroup. In addition to that, Onxeo SA is 3.97 times more volatile than Citigroup. It trades about -0.02 of its total potential returns per unit of risk. Citigroup is currently generating about 0.06 per unit of volatility. If you would invest  4,231  in Citigroup on October 7, 2024 and sell it today you would earn a total of  2,605  from holding Citigroup or generate 61.57% return on investment over 90 days.

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

Onxeo SA  vs.  Citigroup

Onxeo SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Onxeo SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Onxeo SA is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Citigroup

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Onxeo SA and Citigroup

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

The idea behind Onxeo SA and Citigroup 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.