Correlation Between Citigroup and Lyra Therapeutics
Can any of the company-specific risk be diversified away by investing in both Citigroup and Lyra Therapeutics 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 Lyra Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Lyra Therapeutics, you can compare the effects of market volatilities on Citigroup and Lyra Therapeutics 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 Lyra Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Lyra Therapeutics.
Diversification Opportunities for Citigroup and Lyra Therapeutics
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and Lyra is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Lyra Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyra Therapeutics 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 Lyra Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyra Therapeutics has no effect on the direction of Citigroup i.e., Citigroup and Lyra Therapeutics go up and down completely randomly.
Pair Corralation between Citigroup and Lyra Therapeutics
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.25 times more return on investment than Lyra Therapeutics. However, Citigroup is 4.07 times less risky than Lyra Therapeutics. It trades about 0.21 of its potential returns per unit of risk. Lyra Therapeutics is currently generating about -0.14 per unit of risk. If you would invest 6,393 in Citigroup on August 31, 2024 and sell it today you would earn a total of 623.00 from holding Citigroup or generate 9.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Lyra Therapeutics
Performance |
| Timeline |
| Citigroup |
| Lyra Therapeutics |
Citigroup and Lyra Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Lyra Therapeutics
The main advantage of trading using opposite Citigroup and Lyra Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Lyra Therapeutics 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 Lyra Therapeutics will offset losses from the drop in Lyra Therapeutics' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Lyra Therapeutics vs. CytomX Therapeutics | Lyra Therapeutics vs. Assembly Biosciences | Lyra Therapeutics vs. Achilles Therapeutics PLC | Lyra Therapeutics vs. Instil Bio |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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