Correlation Between Citigroup and Lkcm Small
Can any of the company-specific risk be diversified away by investing in both Citigroup and Lkcm Small 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 Lkcm Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Lkcm Small Cap, you can compare the effects of market volatilities on Citigroup and Lkcm Small 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 Lkcm Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Lkcm Small.
Diversification Opportunities for Citigroup and Lkcm Small
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Lkcm is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Lkcm Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lkcm Small Cap 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 Lkcm Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lkcm Small Cap has no effect on the direction of Citigroup i.e., Citigroup and Lkcm Small go up and down completely randomly.
Pair Corralation between Citigroup and Lkcm Small
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.83 times more return on investment than Lkcm Small. However, Citigroup is 1.83 times more volatile than Lkcm Small Cap. It trades about -0.08 of its potential returns per unit of risk. Lkcm Small Cap is currently generating about -0.2 per unit of risk. If you would invest 8,051 in Citigroup on November 28, 2024 and sell it today you would lose (237.00) from holding Citigroup or give up 2.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Citigroup vs. Lkcm Small Cap
Performance |
| Timeline |
| Citigroup |
| Lkcm Small Cap |
Citigroup and Lkcm Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Lkcm Small
The main advantage of trading using opposite Citigroup and Lkcm Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Lkcm Small 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 Lkcm Small will offset losses from the drop in Lkcm Small's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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