Correlation Between Citigroup and Legal General
Can any of the company-specific risk be diversified away by investing in both Citigroup and Legal General 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 Legal General into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Legal General UCITS, you can compare the effects of market volatilities on Citigroup and Legal General 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 Legal General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Legal General.
Diversification Opportunities for Citigroup and Legal General
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Legal is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Legal General UCITS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legal General UCITS 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 Legal General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Legal General UCITS has no effect on the direction of Citigroup i.e., Citigroup and Legal General go up and down completely randomly.
Pair Corralation between Citigroup and Legal General
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.41 times more return on investment than Legal General. However, Citigroup is 2.41 times more volatile than Legal General UCITS. It trades about 0.07 of its potential returns per unit of risk. Legal General UCITS is currently generating about -0.02 per unit of risk. If you would invest 4,524 in Citigroup on September 3, 2024 and sell it today you would earn a total of 2,615 from holding Citigroup or generate 57.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.16% |
| Values | Daily Returns |
Citigroup vs. Legal General UCITS
Performance |
| Timeline |
| Citigroup |
| Legal General UCITS |
Citigroup and Legal General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Legal General
The main advantage of trading using opposite Citigroup and Legal General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Legal General 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 Legal General will offset losses from the drop in Legal General's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Legal General vs. Leverage Shares 3x | Legal General vs. WisdomTree Natural Gas | Legal General vs. Leverage Shares 3x | Legal General vs. GraniteShares 3x Short |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |