Correlation Between Citigroup and Standard Lithium
Can any of the company-specific risk be diversified away by investing in both Citigroup and Standard Lithium 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 Standard Lithium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Standard Lithium, you can compare the effects of market volatilities on Citigroup and Standard Lithium 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 Standard Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Standard Lithium.
Diversification Opportunities for Citigroup and Standard Lithium
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Citigroup and Standard is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Standard Lithium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Standard Lithium 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 Standard Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Standard Lithium has no effect on the direction of Citigroup i.e., Citigroup and Standard Lithium go up and down completely randomly.
Pair Corralation between Citigroup and Standard Lithium
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.32 times more return on investment than Standard Lithium. However, Citigroup is 3.13 times less risky than Standard Lithium. It trades about 0.11 of its potential returns per unit of risk. Standard Lithium is currently generating about 0.02 per unit of risk. If you would invest 4,788 in Citigroup on September 12, 2024 and sell it today you would earn a total of 2,462 from holding Citigroup or generate 51.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.8% |
| Values | Daily Returns |
Citigroup vs. Standard Lithium
Performance |
| Timeline |
| Citigroup |
| Standard Lithium |
Citigroup and Standard Lithium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Standard Lithium
The main advantage of trading using opposite Citigroup and Standard Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Standard Lithium 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 Standard Lithium will offset losses from the drop in Standard Lithium's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Standard Lithium vs. BHP Group Limited | Standard Lithium vs. Vale SA | Standard Lithium vs. Superior Plus Corp | Standard Lithium vs. SIVERS SEMICONDUCTORS AB |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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