Correlation Between Citigroup and Lazard Corporate
Can any of the company-specific risk be diversified away by investing in both Citigroup and Lazard Corporate 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 Lazard Corporate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Lazard Corporate Income, you can compare the effects of market volatilities on Citigroup and Lazard Corporate 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 Lazard Corporate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Lazard Corporate.
Diversification Opportunities for Citigroup and Lazard Corporate
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citigroup and Lazard is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Lazard Corporate Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard Corporate Income 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 Lazard Corporate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lazard Corporate Income has no effect on the direction of Citigroup i.e., Citigroup and Lazard Corporate go up and down completely randomly.
Pair Corralation between Citigroup and Lazard Corporate
Taking into account the 90-day investment horizon Citigroup is expected to generate 6.25 times more return on investment than Lazard Corporate. However, Citigroup is 6.25 times more volatile than Lazard Corporate Income. It trades about 0.03 of its potential returns per unit of risk. Lazard Corporate Income is currently generating about -0.15 per unit of risk. If you would invest 7,101 in Citigroup on October 14, 2024 and sell it today you would earn a total of 39.00 from holding Citigroup or generate 0.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Lazard Corporate Income
Performance |
| Timeline |
| Citigroup |
| Lazard Corporate Income |
Citigroup and Lazard Corporate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Lazard Corporate
The main advantage of trading using opposite Citigroup and Lazard Corporate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Lazard Corporate 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 Lazard Corporate will offset losses from the drop in Lazard Corporate's long position.| Citigroup vs. Nu Holdings | Citigroup vs. Canadian Imperial Bank | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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