Correlation Between Citigroup and Lootom Telcovideo

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Can any of the company-specific risk be diversified away by investing in both Citigroup and Lootom Telcovideo 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 Lootom Telcovideo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Lootom Telcovideo Network, you can compare the effects of market volatilities on Citigroup and Lootom Telcovideo 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 Lootom Telcovideo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Lootom Telcovideo.

Diversification Opportunities for Citigroup and Lootom Telcovideo

-0.62
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Citigroup and Lootom is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Lootom Telcovideo Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lootom Telcovideo Network 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 Lootom Telcovideo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lootom Telcovideo Network has no effect on the direction of Citigroup i.e., Citigroup and Lootom Telcovideo go up and down completely randomly.

Pair Corralation between Citigroup and Lootom Telcovideo

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.6 times more return on investment than Lootom Telcovideo. However, Citigroup is 1.66 times less risky than Lootom Telcovideo. It trades about 0.07 of its potential returns per unit of risk. Lootom Telcovideo Network is currently generating about 0.02 per unit of risk. If you would invest  4,295  in Citigroup on January 21, 2025 and sell it today you would earn a total of  2,030  from holding Citigroup or generate 47.26% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy96.29%
ValuesDaily Returns

Citigroup  vs.  Lootom Telcovideo Network

 Performance 
       Timeline  
Citigroup 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Citigroup has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in May 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.
Lootom Telcovideo Network 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Lootom Telcovideo Network are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Lootom Telcovideo sustained solid returns over the last few months and may actually be approaching a breakup point.

Citigroup and Lootom Telcovideo Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Citigroup and Lootom Telcovideo

The main advantage of trading using opposite Citigroup and Lootom Telcovideo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Lootom Telcovideo 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 Lootom Telcovideo will offset losses from the drop in Lootom Telcovideo's long position.
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The idea behind Citigroup and Lootom Telcovideo Network 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.
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.

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