Correlation Between Citigroup and Lloyds Banking
Can any of the company-specific risk be diversified away by investing in both Citigroup and Lloyds Banking 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 Lloyds Banking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Lloyds Banking Group, you can compare the effects of market volatilities on Citigroup and Lloyds Banking 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 Lloyds Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Lloyds Banking.
Diversification Opportunities for Citigroup and Lloyds Banking
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and Lloyds is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Lloyds Banking Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lloyds Banking Group 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 Lloyds Banking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lloyds Banking Group has no effect on the direction of Citigroup i.e., Citigroup and Lloyds Banking go up and down completely randomly.
Pair Corralation between Citigroup and Lloyds Banking
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.78 times more return on investment than Lloyds Banking. However, Citigroup is 1.28 times less risky than Lloyds Banking. It trades about 0.08 of its potential returns per unit of risk. Lloyds Banking Group is currently generating about 0.05 per unit of risk. If you would invest 5,415 in Citigroup on August 28, 2024 and sell it today you would earn a total of 1,660 from holding Citigroup or generate 30.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 98.56% |
| Values | Daily Returns |
Citigroup vs. Lloyds Banking Group
Performance |
| Timeline |
| Citigroup |
| Lloyds Banking Group |
Citigroup and Lloyds Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Lloyds Banking
The main advantage of trading using opposite Citigroup and Lloyds Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Lloyds Banking 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 Lloyds Banking will offset losses from the drop in Lloyds Banking's long position.| Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
| Lloyds Banking vs. Taiwan Semiconductor Manufacturing | Lloyds Banking vs. Prudential Financial | Lloyds Banking vs. Genworth Financial | Lloyds Banking vs. Micron Technology |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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