Correlation Between Citigroup and Lasertec
Can any of the company-specific risk be diversified away by investing in both Citigroup and Lasertec 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 Lasertec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Lasertec, you can compare the effects of market volatilities on Citigroup and Lasertec 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 Lasertec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Lasertec.
Diversification Opportunities for Citigroup and Lasertec
Excellent diversification
The 3 months correlation between Citigroup and Lasertec is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Lasertec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lasertec 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 Lasertec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lasertec has no effect on the direction of Citigroup i.e., Citigroup and Lasertec go up and down completely randomly.
Pair Corralation between Citigroup and Lasertec
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.52 times more return on investment than Lasertec. However, Citigroup is 1.92 times less risky than Lasertec. It trades about 0.08 of its potential returns per unit of risk. Lasertec is currently generating about -0.02 per unit of risk. If you would invest 4,347 in Citigroup on August 24, 2024 and sell it today you would earn a total of 2,637 from holding Citigroup or generate 60.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Lasertec
Performance |
| Timeline |
| Citigroup |
| Lasertec |
Citigroup and Lasertec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Lasertec
The main advantage of trading using opposite Citigroup and Lasertec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Lasertec 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 Lasertec will offset losses from the drop in Lasertec's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Lasertec vs. Sumco Corp ADR | Lasertec vs. Asm Pacific Technology | Lasertec vs. Tokyo Electron | Lasertec vs. Advantest |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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