Correlation Between Citigroup and Lantern Pharma
Can any of the company-specific risk be diversified away by investing in both Citigroup and Lantern Pharma 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 Lantern Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Lantern Pharma, you can compare the effects of market volatilities on Citigroup and Lantern Pharma 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 Lantern Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Lantern Pharma.
Diversification Opportunities for Citigroup and Lantern Pharma
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Lantern is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Lantern Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lantern Pharma 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 Lantern Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lantern Pharma has no effect on the direction of Citigroup i.e., Citigroup and Lantern Pharma go up and down completely randomly.
Pair Corralation between Citigroup and Lantern Pharma
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.27 times more return on investment than Lantern Pharma. However, Citigroup is 3.76 times less risky than Lantern Pharma. It trades about 0.11 of its potential returns per unit of risk. Lantern Pharma is currently generating about 0.02 per unit of risk. If you would invest 4,567 in Citigroup on August 29, 2024 and sell it today you would earn a total of 2,408 from holding Citigroup or generate 52.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Lantern Pharma
Performance |
| Timeline |
| Citigroup |
| Lantern Pharma |
Citigroup and Lantern Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Lantern Pharma
The main advantage of trading using opposite Citigroup and Lantern Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Lantern Pharma 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 Lantern Pharma will offset losses from the drop in Lantern Pharma's long position.The idea behind Citigroup and Lantern Pharma pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Lantern Pharma vs. Tff Pharmaceuticals | Lantern Pharma vs. Generation Bio Co | Lantern Pharma vs. Lyra Therapeutics | Lantern Pharma vs. Immunome |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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