Correlation Between Citigroup and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Citigroup and Lord Abbett 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 Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Lord Abbett Short, you can compare the effects of market volatilities on Citigroup and Lord Abbett 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 Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Lord Abbett.
Diversification Opportunities for Citigroup and Lord Abbett
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Citigroup and Lord is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Lord Abbett Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Short 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 Lord Abbett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lord Abbett Short has no effect on the direction of Citigroup i.e., Citigroup and Lord Abbett go up and down completely randomly.
Pair Corralation between Citigroup and Lord Abbett
Taking into account the 90-day investment horizon Citigroup is expected to generate 10.68 times more return on investment than Lord Abbett. However, Citigroup is 10.68 times more volatile than Lord Abbett Short. It trades about 0.1 of its potential returns per unit of risk. Lord Abbett Short is currently generating about 0.14 per unit of risk. If you would invest 4,357 in Citigroup on August 26, 2024 and sell it today you would earn a total of 2,627 from holding Citigroup or generate 60.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Lord Abbett Short
Performance |
| Timeline |
| Citigroup |
| Lord Abbett Short |
Citigroup and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Lord Abbett
The main advantage of trading using opposite Citigroup and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Lord Abbett 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 Lord Abbett will offset losses from the drop in Lord Abbett's long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
| Lord Abbett vs. Lord Abbett Trust | Lord Abbett vs. Lord Abbett Trust | Lord Abbett vs. Lord Abbett Focused | Lord Abbett vs. Floating Rate Fund |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |