Correlation Between Citigroup and Lookers Plc
Can any of the company-specific risk be diversified away by investing in both Citigroup and Lookers Plc 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 Lookers Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Lookers Plc, you can compare the effects of market volatilities on Citigroup and Lookers Plc 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 Lookers Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Lookers Plc.
Diversification Opportunities for Citigroup and Lookers Plc
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Lookers is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Lookers Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lookers Plc 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 Lookers Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lookers Plc has no effect on the direction of Citigroup i.e., Citigroup and Lookers Plc go up and down completely randomly.
Pair Corralation between Citigroup and Lookers Plc
If you would invest 6,315 in Citigroup on September 2, 2024 and sell it today you would earn a total of 772.00 from holding Citigroup or generate 12.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Citigroup vs. Lookers Plc
Performance |
| Timeline |
| Citigroup |
| Lookers Plc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Citigroup and Lookers Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Lookers Plc
The main advantage of trading using opposite Citigroup and Lookers Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Lookers Plc 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 Lookers Plc will offset losses from the drop in Lookers Plc's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Lookers Plc vs. Consumer Automotive Finance | Lookers Plc vs. Vroom Inc | Lookers Plc vs. Kaixin Auto Holdings | Lookers Plc vs. Uxin |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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