Correlation Between Citigroup and Leafly Holdings
Can any of the company-specific risk be diversified away by investing in both Citigroup and Leafly Holdings 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 Leafly Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Leafly Holdings, you can compare the effects of market volatilities on Citigroup and Leafly Holdings 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 Leafly Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Leafly Holdings.
Diversification Opportunities for Citigroup and Leafly Holdings
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Citigroup and Leafly is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Leafly Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leafly Holdings 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 Leafly Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leafly Holdings has no effect on the direction of Citigroup i.e., Citigroup and Leafly Holdings go up and down completely randomly.
Pair Corralation between Citigroup and Leafly Holdings
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.19 times more return on investment than Leafly Holdings. However, Citigroup is 5.37 times less risky than Leafly Holdings. It trades about 0.25 of its potential returns per unit of risk. Leafly Holdings is currently generating about -0.11 per unit of risk. If you would invest 6,360 in Citigroup on August 28, 2024 and sell it today you would earn a total of 715.00 from holding Citigroup or generate 11.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Leafly Holdings
Performance |
| Timeline |
| Citigroup |
| Leafly Holdings |
Citigroup and Leafly Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Leafly Holdings
The main advantage of trading using opposite Citigroup and Leafly Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Leafly Holdings 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 Leafly Holdings will offset losses from the drop in Leafly Holdings' long position.| Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
| Leafly Holdings vs. Leafly Holdings | Leafly Holdings vs. WM Technology | Leafly Holdings vs. Revelation Biosciences | Leafly Holdings vs. AEye Inc |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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