Correlation Between Citigroup and LG Display
Can any of the company-specific risk be diversified away by investing in both Citigroup and LG Display 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 LG Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and LG Display Co, you can compare the effects of market volatilities on Citigroup and LG Display 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 LG Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and LG Display.
Diversification Opportunities for Citigroup and LG Display
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and 034220 is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and LG Display Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Display 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 LG Display. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG Display has no effect on the direction of Citigroup i.e., Citigroup and LG Display go up and down completely randomly.
Pair Corralation between Citigroup and LG Display
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.71 times more return on investment than LG Display. However, Citigroup is 1.4 times less risky than LG Display. It trades about 0.07 of its potential returns per unit of risk. LG Display Co is currently generating about -0.01 per unit of risk. If you would invest 4,118 in Citigroup on August 29, 2024 and sell it today you would earn a total of 2,857 from holding Citigroup or generate 69.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.38% |
| Values | Daily Returns |
Citigroup vs. LG Display Co
Performance |
| Timeline |
| Citigroup |
| LG Display |
Citigroup and LG Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and LG Display
The main advantage of trading using opposite Citigroup and LG Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, LG Display 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 LG Display will offset losses from the drop in LG Display's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| LG Display vs. AptaBio Therapeutics | LG Display vs. Daewoo SBI SPAC | LG Display vs. Dream Security co | LG Display vs. Microfriend |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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