Correlation Between Citigroup and Lexinfintech Holdings
Can any of the company-specific risk be diversified away by investing in both Citigroup and Lexinfintech Holdings 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 Lexinfintech Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Lexinfintech Holdings, you can compare the effects of market volatilities on Citigroup and Lexinfintech Holdings 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 Lexinfintech Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Lexinfintech Holdings.
Diversification Opportunities for Citigroup and Lexinfintech Holdings
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and Lexinfintech is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Lexinfintech Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lexinfintech Holdings 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 Lexinfintech Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lexinfintech Holdings has no effect on the direction of Citigroup i.e., Citigroup and Lexinfintech Holdings go up and down completely randomly.
Pair Corralation between Citigroup and Lexinfintech Holdings
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.04 times less return on investment than Lexinfintech Holdings. But when comparing it to its historical volatility, Citigroup is 2.48 times less risky than Lexinfintech Holdings. It trades about 0.45 of its potential returns per unit of risk. Lexinfintech Holdings is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 577.00 in Lexinfintech Holdings on November 2, 2024 and sell it today you would earn a total of 208.00 from holding Lexinfintech Holdings or generate 36.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Lexinfintech Holdings
Performance |
| Timeline |
| Citigroup |
| Lexinfintech Holdings |
Citigroup and Lexinfintech Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Lexinfintech Holdings
The main advantage of trading using opposite Citigroup and Lexinfintech Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Lexinfintech Holdings 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 Lexinfintech Holdings will offset losses from the drop in Lexinfintech Holdings' long position.| Citigroup vs. Royal Bank of | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Canadian Imperial Bank |
| Lexinfintech Holdings vs. 360 Finance | Lexinfintech Holdings vs. Atlanticus Holdings | Lexinfintech Holdings vs. Qudian Inc | Lexinfintech Holdings vs. Enova International |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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