Correlation Between Citigroup and LumenRadio
Can any of the company-specific risk be diversified away by investing in both Citigroup and LumenRadio 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 LumenRadio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and LumenRadio AB, you can compare the effects of market volatilities on Citigroup and LumenRadio 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 LumenRadio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and LumenRadio.
Diversification Opportunities for Citigroup and LumenRadio
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and LumenRadio is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and LumenRadio AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LumenRadio AB 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 LumenRadio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LumenRadio AB has no effect on the direction of Citigroup i.e., Citigroup and LumenRadio go up and down completely randomly.
Pair Corralation between Citigroup and LumenRadio
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.1 times more return on investment than LumenRadio. However, Citigroup is 1.1 times more volatile than LumenRadio AB. It trades about 0.27 of its potential returns per unit of risk. LumenRadio AB is currently generating about -0.1 per unit of risk. If you would invest 6,315 in Citigroup on September 2, 2024 and sell it today you would earn a total of 772.00 from holding Citigroup or generate 12.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Citigroup vs. LumenRadio AB
Performance |
| Timeline |
| Citigroup |
| LumenRadio AB |
Citigroup and LumenRadio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and LumenRadio
The main advantage of trading using opposite Citigroup and LumenRadio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, LumenRadio 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 LumenRadio will offset losses from the drop in LumenRadio's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| LumenRadio vs. Invisio Communications AB | LumenRadio vs. Online Brands Nordic | LumenRadio vs. Havsfrun Investment AB | LumenRadio vs. G5 Entertainment publ |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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