Correlation Between Citigroup and Logista
Can any of the company-specific risk be diversified away by investing in both Citigroup and Logista 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 Logista into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Logista, you can compare the effects of market volatilities on Citigroup and Logista 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 Logista. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Logista.
Diversification Opportunities for Citigroup and Logista
Poor diversification
The 3 months correlation between Citigroup and Logista is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Logista in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Logista 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 Logista. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Logista has no effect on the direction of Citigroup i.e., Citigroup and Logista go up and down completely randomly.
Pair Corralation between Citigroup and Logista
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.62 times more return on investment than Logista. However, Citigroup is 1.62 times more volatile than Logista. It trades about 0.07 of its potential returns per unit of risk. Logista is currently generating about 0.08 per unit of risk. If you would invest 4,206 in Citigroup on August 26, 2024 and sell it today you would earn a total of 2,778 from holding Citigroup or generate 66.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.22% |
| Values | Daily Returns |
Citigroup vs. Logista
Performance |
| Timeline |
| Citigroup |
| Logista |
Citigroup and Logista Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Logista
The main advantage of trading using opposite Citigroup and Logista positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Logista 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 Logista will offset losses from the drop in Logista's long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
| Logista vs. Global Ship Lease | Logista vs. Scandinavian Tobacco Group | Logista vs. CONAGRA FOODS | Logista vs. IMPERIAL TOBACCO |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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