Correlation Between Citigroup and Park Lawn
Can any of the company-specific risk be diversified away by investing in both Citigroup and Park Lawn 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 Park Lawn into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Park Lawn, you can compare the effects of market volatilities on Citigroup and Park Lawn 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 Park Lawn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Park Lawn.
Diversification Opportunities for Citigroup and Park Lawn
Poor diversification
The 3 months correlation between Citigroup and Park is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Park Lawn in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Park Lawn 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 Park Lawn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Park Lawn has no effect on the direction of Citigroup i.e., Citigroup and Park Lawn go up and down completely randomly.
Pair Corralation between Citigroup and Park Lawn
If you would invest 6,133 in Citigroup on August 28, 2024 and sell it today you would earn a total of 842.00 from holding Citigroup or generate 13.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 2.33% |
| Values | Daily Returns |
Citigroup vs. Park Lawn
Performance |
| Timeline |
| Citigroup |
| Park Lawn |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Citigroup and Park Lawn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Park Lawn
The main advantage of trading using opposite Citigroup and Park Lawn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Park Lawn 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 Park Lawn will offset losses from the drop in Park Lawn's long position.The idea behind Citigroup and Park Lawn pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Park Lawn vs. XWELL Inc | Park Lawn vs. Mister Car Wash | Park Lawn vs. Interactive Strength Common | Park Lawn vs. Goodfood Market Corp |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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