Correlation Between Citigroup and Locorr Hedged
Can any of the company-specific risk be diversified away by investing in both Citigroup and Locorr Hedged 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 Locorr Hedged into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Locorr Hedged Core, you can compare the effects of market volatilities on Citigroup and Locorr Hedged 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 Locorr Hedged. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Locorr Hedged.
Diversification Opportunities for Citigroup and Locorr Hedged
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citigroup and Locorr is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Locorr Hedged Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Locorr Hedged Core 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 Locorr Hedged. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Locorr Hedged Core has no effect on the direction of Citigroup i.e., Citigroup and Locorr Hedged go up and down completely randomly.
Pair Corralation between Citigroup and Locorr Hedged
Taking into account the 90-day investment horizon Citigroup is expected to generate 4.39 times more return on investment than Locorr Hedged. However, Citigroup is 4.39 times more volatile than Locorr Hedged Core. It trades about 0.15 of its potential returns per unit of risk. Locorr Hedged Core is currently generating about 0.0 per unit of risk. If you would invest 6,968 in Citigroup on November 27, 2024 and sell it today you would earn a total of 997.00 from holding Citigroup or generate 14.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.31% |
| Values | Daily Returns |
Citigroup vs. Locorr Hedged Core
Performance |
| Timeline |
| Citigroup |
| Locorr Hedged Core |
Citigroup and Locorr Hedged Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Locorr Hedged
The main advantage of trading using opposite Citigroup and Locorr Hedged positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Locorr Hedged 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 Locorr Hedged will offset losses from the drop in Locorr Hedged's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Locorr Hedged vs. Guidemark Large Cap | Locorr Hedged vs. Old Westbury Large | Locorr Hedged vs. Vest Large Cap | Locorr Hedged vs. Jpmorgan Large Cap |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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