Correlation Between Citigroup and Loxley Public
Can any of the company-specific risk be diversified away by investing in both Citigroup and Loxley Public 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 Loxley Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Loxley Public, you can compare the effects of market volatilities on Citigroup and Loxley Public 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 Loxley Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Loxley Public.
Diversification Opportunities for Citigroup and Loxley Public
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Citigroup and Loxley is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Loxley Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loxley Public 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 Loxley Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Loxley Public has no effect on the direction of Citigroup i.e., Citigroup and Loxley Public go up and down completely randomly.
Pair Corralation between Citigroup and Loxley Public
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.23 times more return on investment than Loxley Public. However, Citigroup is 2.23 times more volatile than Loxley Public. It trades about 0.14 of its potential returns per unit of risk. Loxley Public is currently generating about -0.07 per unit of risk. If you would invest 6,205 in Citigroup on August 29, 2024 and sell it today you would earn a total of 770.00 from holding Citigroup or generate 12.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.35% |
| Values | Daily Returns |
Citigroup vs. Loxley Public
Performance |
| Timeline |
| Citigroup |
| Loxley Public |
Citigroup and Loxley Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Loxley Public
The main advantage of trading using opposite Citigroup and Loxley Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Loxley Public 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 Loxley Public will offset losses from the drop in Loxley Public's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Loxley Public vs. Jasmine International Public | Loxley Public vs. LPN Development Public | Loxley Public vs. Italian Thai Development Public | Loxley Public vs. MC Group Public |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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