Correlation Between Citigroup and LBI Capital
Can any of the company-specific risk be diversified away by investing in both Citigroup and LBI Capital 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 LBI Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and LBI Capital Bhd, you can compare the effects of market volatilities on Citigroup and LBI Capital 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 LBI Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and LBI Capital.
Diversification Opportunities for Citigroup and LBI Capital
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Citigroup and LBI is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and LBI Capital Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LBI Capital Bhd 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 LBI Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LBI Capital Bhd has no effect on the direction of Citigroup i.e., Citigroup and LBI Capital go up and down completely randomly.
Pair Corralation between Citigroup and LBI Capital
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.5 times more return on investment than LBI Capital. However, Citigroup is 2.0 times less risky than LBI Capital. It trades about 0.08 of its potential returns per unit of risk. LBI Capital Bhd is currently generating about 0.02 per unit of risk. If you would invest 4,558 in Citigroup on September 2, 2024 and sell it today you would earn a total of 2,529 from holding Citigroup or generate 55.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.59% |
| Values | Daily Returns |
Citigroup vs. LBI Capital Bhd
Performance |
| Timeline |
| Citigroup |
| LBI Capital Bhd |
Citigroup and LBI Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and LBI Capital
The main advantage of trading using opposite Citigroup and LBI Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, LBI Capital 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 LBI Capital will offset losses from the drop in LBI Capital's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| LBI Capital vs. SFP Tech Holdings | LBI Capital vs. Malaysia Steel Works | LBI Capital vs. Duopharma Biotech Bhd | LBI Capital vs. Resintech Bhd |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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