Correlation Between Lion One and CITIGROUP

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Can any of the company-specific risk be diversified away by investing in both Lion One and CITIGROUP 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 Lion One and CITIGROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lion One Metals and CITIGROUP INC 55, you can compare the effects of market volatilities on Lion One and CITIGROUP 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 Lion One with a short position of CITIGROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and CITIGROUP.

Diversification Opportunities for Lion One and CITIGROUP

0.18
  Correlation Coefficient

Average diversification

The 3 months correlation between Lion and CITIGROUP is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals and CITIGROUP INC 55 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIGROUP INC 55 and Lion One 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 Lion One Metals are associated (or correlated) with CITIGROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITIGROUP INC 55 has no effect on the direction of Lion One i.e., Lion One and CITIGROUP go up and down completely randomly.

Pair Corralation between Lion One and CITIGROUP

Assuming the 90 days horizon Lion One Metals is expected to under-perform the CITIGROUP. In addition to that, Lion One is 8.89 times more volatile than CITIGROUP INC 55. It trades about -0.26 of its total potential returns per unit of risk. CITIGROUP INC 55 is currently generating about -0.09 per unit of volatility. If you would invest  10,052  in CITIGROUP INC 55 on September 4, 2024 and sell it today you would lose (63.00) from holding CITIGROUP INC 55 or give up 0.63% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy90.48%
ValuesDaily Returns

Lion One Metals  vs.  CITIGROUP INC 55

 Performance 
       Timeline  
Lion One Metals 

Risk-Adjusted Performance

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Over the last 90 days Lion One Metals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, Lion One is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
CITIGROUP INC 55 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days CITIGROUP INC 55 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, CITIGROUP is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Lion One and CITIGROUP Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Lion One and CITIGROUP

The main advantage of trading using opposite Lion One and CITIGROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One position performs unexpectedly, CITIGROUP 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 CITIGROUP will offset losses from the drop in CITIGROUP's long position.
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The idea behind Lion One Metals and CITIGROUP INC 55 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.
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.

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