Correlation Between Citigroup and Loop Telecommunicatio
Can any of the company-specific risk be diversified away by investing in both Citigroup and Loop Telecommunicatio 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 Loop Telecommunicatio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Loop Telecommunication International, you can compare the effects of market volatilities on Citigroup and Loop Telecommunicatio 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 Loop Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Loop Telecommunicatio.
Diversification Opportunities for Citigroup and Loop Telecommunicatio
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Loop is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Loop Telecommunication Interna in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loop Telecommunication 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 Loop Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Loop Telecommunication has no effect on the direction of Citigroup i.e., Citigroup and Loop Telecommunicatio go up and down completely randomly.
Pair Corralation between Citigroup and Loop Telecommunicatio
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.33 times less return on investment than Loop Telecommunicatio. But when comparing it to its historical volatility, Citigroup is 2.23 times less risky than Loop Telecommunicatio. It trades about 0.12 of its potential returns per unit of risk. Loop Telecommunication International is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 4,005 in Loop Telecommunication International on August 30, 2024 and sell it today you would earn a total of 3,375 from holding Loop Telecommunication International or generate 84.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.44% |
| Values | Daily Returns |
Citigroup vs. Loop Telecommunication Interna
Performance |
| Timeline |
| Citigroup |
| Loop Telecommunication |
Citigroup and Loop Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Loop Telecommunicatio
The main advantage of trading using opposite Citigroup and Loop Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Loop Telecommunicatio 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 Loop Telecommunicatio will offset losses from the drop in Loop Telecommunicatio's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Loop Telecommunicatio vs. Sitronix Technology Corp | Loop Telecommunicatio vs. Elan Microelectronics Corp | Loop Telecommunicatio vs. Holtek Semiconductor |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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