Correlation Between Citigroup and Lowell Farms
Can any of the company-specific risk be diversified away by investing in both Citigroup and Lowell Farms 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 Lowell Farms into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Lowell Farms, you can compare the effects of market volatilities on Citigroup and Lowell Farms 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 Lowell Farms. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Lowell Farms.
Diversification Opportunities for Citigroup and Lowell Farms
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Citigroup and Lowell is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Lowell Farms in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lowell Farms 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 Lowell Farms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lowell Farms has no effect on the direction of Citigroup i.e., Citigroup and Lowell Farms go up and down completely randomly.
Pair Corralation between Citigroup and Lowell Farms
Taking into account the 90-day investment horizon Citigroup is expected to generate 6.47 times less return on investment than Lowell Farms. But when comparing it to its historical volatility, Citigroup is 13.05 times less risky than Lowell Farms. It trades about 0.12 of its potential returns per unit of risk. Lowell Farms is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 26.00 in Lowell Farms on August 25, 2024 and sell it today you would lose (24.30) from holding Lowell Farms or give up 93.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Lowell Farms
Performance |
| Timeline |
| Citigroup |
| Lowell Farms |
Citigroup and Lowell Farms Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Lowell Farms
The main advantage of trading using opposite Citigroup and Lowell Farms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Lowell Farms 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 Lowell Farms will offset losses from the drop in Lowell Farms' long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
| Lowell Farms vs. Green Cures Botanical | Lowell Farms vs. Galexxy Holdings | Lowell Farms vs. Indoor Harvest Corp | Lowell Farms vs. Speakeasy Cannabis Club |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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