Correlation Between Citigroup and Latin Resources
Can any of the company-specific risk be diversified away by investing in both Citigroup and Latin Resources 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 Latin Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Latin Resources, you can compare the effects of market volatilities on Citigroup and Latin Resources 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 Latin Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Latin Resources.
Diversification Opportunities for Citigroup and Latin Resources
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Citigroup and Latin is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Latin Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Latin Resources 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 Latin Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Latin Resources has no effect on the direction of Citigroup i.e., Citigroup and Latin Resources go up and down completely randomly.
Pair Corralation between Citigroup and Latin Resources
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.46 times more return on investment than Latin Resources. However, Citigroup is 2.16 times less risky than Latin Resources. It trades about 0.21 of its potential returns per unit of risk. Latin Resources is currently generating about -0.15 per unit of risk. If you would invest 6,393 in Citigroup on August 31, 2024 and sell it today you would earn a total of 623.00 from holding Citigroup or generate 9.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Citigroup vs. Latin Resources
Performance |
| Timeline |
| Citigroup |
| Latin Resources |
Citigroup and Latin Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Latin Resources
The main advantage of trading using opposite Citigroup and Latin Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Latin Resources 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 Latin Resources will offset losses from the drop in Latin Resources' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Latin Resources vs. Ramsay Health Care | Latin Resources vs. BTC Health Limited | Latin Resources vs. Computershare | Latin Resources vs. Richmond Vanadium Technology |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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