Correlation Between Citigroup and Ossiam Irl

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

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

Diversification Opportunities for Citigroup and Ossiam Irl

0.95

Correlation Coefficient

Citigroup  Ossiam Irl

Almost no diversification

The 3 months correlation between Citigroup and Ossiam is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Ossiam Irl Icav in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ossiam Irl Icav 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 Ossiam Irl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ossiam Irl Icav has no effect on the direction of Citigroup i.e., Citigroup and Ossiam Irl go up and down completely randomly.

Pair Corralation between Citigroup and Ossiam Irl

Taking into account the 90-day investment horizon Citigroup is expected to generate 2.19 times more return on investment than Ossiam Irl. However, Citigroup is 2.19 times more volatile than Ossiam Irl Icav. It trades about 0.14 of its potential returns per unit of risk. Ossiam Irl Icav is currently generating about 0.21 per unit of risk. If you would invest  6,117  in Citigroup on September 26, 2024 and sell it today you would earn a total of  983.00  from holding Citigroup or generate 16.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.44%
Values	Daily Returns

Citigroup  vs.  Ossiam Irl Icav

Citigroup

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

Ossiam Irl Icav

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ossiam Irl Icav are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Ossiam Irl may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Citigroup and Ossiam Irl

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

The idea behind Citigroup and Ossiam Irl Icav 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.