Correlation Between Citigroup and Lee Feed
Can any of the company-specific risk be diversified away by investing in both Citigroup and Lee Feed 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 Lee Feed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Lee Feed Mill, you can compare the effects of market volatilities on Citigroup and Lee Feed 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 Lee Feed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Lee Feed.
Diversification Opportunities for Citigroup and Lee Feed
Significant diversification
The 3 months correlation between Citigroup and Lee is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Lee Feed Mill in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lee Feed Mill 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 Lee Feed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lee Feed Mill has no effect on the direction of Citigroup i.e., Citigroup and Lee Feed go up and down completely randomly.
Pair Corralation between Citigroup and Lee Feed
Taking into account the 90-day investment horizon Citigroup is expected to generate 57.11 times less return on investment than Lee Feed. But when comparing it to its historical volatility, Citigroup is 63.93 times less risky than Lee Feed. It trades about 0.13 of its potential returns per unit of risk. Lee Feed Mill is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 244.00 in Lee Feed Mill on August 28, 2024 and sell it today you would lose (2.00) from holding Lee Feed Mill or give up 0.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.41% |
| Values | Daily Returns |
Citigroup vs. Lee Feed Mill
Performance |
| Timeline |
| Citigroup |
| Lee Feed Mill |
Citigroup and Lee Feed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Lee Feed
The main advantage of trading using opposite Citigroup and Lee Feed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Lee Feed 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 Lee Feed will offset losses from the drop in Lee Feed's long position.| Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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