Correlation Between Citigroup and Lotte Rental
Can any of the company-specific risk be diversified away by investing in both Citigroup and Lotte Rental 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 Lotte Rental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Lotte Rental Co, you can compare the effects of market volatilities on Citigroup and Lotte Rental 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 Lotte Rental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Lotte Rental.
Diversification Opportunities for Citigroup and Lotte Rental
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citigroup and Lotte is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Lotte Rental Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotte Rental 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 Lotte Rental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotte Rental has no effect on the direction of Citigroup i.e., Citigroup and Lotte Rental go up and down completely randomly.
Pair Corralation between Citigroup and Lotte Rental
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.12 times more return on investment than Lotte Rental. However, Citigroup is 1.12 times more volatile than Lotte Rental Co. It trades about -0.02 of its potential returns per unit of risk. Lotte Rental Co is currently generating about -0.22 per unit of risk. If you would invest 7,196 in Citigroup on October 12, 2024 and sell it today you would lose (56.00) from holding Citigroup or give up 0.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Lotte Rental Co
Performance |
| Timeline |
| Citigroup |
| Lotte Rental |
Citigroup and Lotte Rental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Lotte Rental
The main advantage of trading using opposite Citigroup and Lotte Rental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Lotte Rental 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 Lotte Rental will offset losses from the drop in Lotte Rental's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Lotte Rental vs. Samsung Electronics Co | Lotte Rental vs. Samsung Electronics Co | Lotte Rental vs. LG Energy Solution | Lotte Rental vs. SK Hynix |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |