Correlation Between Citigroup and Locorr Spectrum
Can any of the company-specific risk be diversified away by investing in both Citigroup and Locorr Spectrum 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 Locorr Spectrum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Locorr Spectrum Income, you can compare the effects of market volatilities on Citigroup and Locorr Spectrum 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 Locorr Spectrum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Locorr Spectrum.
Diversification Opportunities for Citigroup and Locorr Spectrum
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Citigroup and Locorr is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Locorr Spectrum Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Locorr Spectrum Income 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 Locorr Spectrum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Locorr Spectrum Income has no effect on the direction of Citigroup i.e., Citigroup and Locorr Spectrum go up and down completely randomly.
Pair Corralation between Citigroup and Locorr Spectrum
Taking into account the 90-day investment horizon Citigroup is expected to generate 4.13 times more return on investment than Locorr Spectrum. However, Citigroup is 4.13 times more volatile than Locorr Spectrum Income. It trades about 0.21 of its potential returns per unit of risk. Locorr Spectrum Income is currently generating about 0.17 per unit of risk. If you would invest 6,360 in Citigroup on August 29, 2024 and sell it today you would earn a total of 615.00 from holding Citigroup or generate 9.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Citigroup vs. Locorr Spectrum Income
Performance |
| Timeline |
| Citigroup |
| Locorr Spectrum Income |
Citigroup and Locorr Spectrum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Locorr Spectrum
The main advantage of trading using opposite Citigroup and Locorr Spectrum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Locorr Spectrum 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 Locorr Spectrum will offset losses from the drop in Locorr Spectrum's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Locorr Spectrum vs. Angel Oak Financial | Locorr Spectrum vs. Gabelli Global Financial | Locorr Spectrum vs. John Hancock Financial | Locorr Spectrum vs. Financials Ultrasector Profund |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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