Correlation Between Lupatech and Citigroup
Can any of the company-specific risk be diversified away by investing in both Lupatech 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 Lupatech and Citigroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lupatech SA and Citigroup, you can compare the effects of market volatilities on Lupatech 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 Lupatech with a short position of Citigroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lupatech and Citigroup.
Diversification Opportunities for Lupatech and Citigroup
Excellent diversification
The 3 months correlation between Lupatech and Citigroup is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Lupatech SA and Citigroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citigroup and Lupatech 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 Lupatech SA 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 has no effect on the direction of Lupatech i.e., Lupatech and Citigroup go up and down completely randomly.
Pair Corralation between Lupatech and Citigroup
Assuming the 90 days trading horizon Lupatech SA is expected to under-perform the Citigroup. In addition to that, Lupatech is 2.19 times more volatile than Citigroup. It trades about -0.04 of its total potential returns per unit of risk. Citigroup is currently generating about 0.08 per unit of volatility. If you would invest 3,836 in Citigroup on September 24, 2024 and sell it today you would earn a total of 3,248 from holding Citigroup or generate 84.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Lupatech SA vs. Citigroup
Performance |
| Timeline |
| Lupatech SA |
| Citigroup |
Lupatech and Citigroup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lupatech and Citigroup
The main advantage of trading using opposite Lupatech and Citigroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lupatech 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.| Lupatech vs. Ita Unibanco Holding | Lupatech vs. Ita Unibanco Holding | Lupatech vs. Banco Santander SA | Lupatech vs. Banco Santander SA |
| Citigroup vs. Bemobi Mobile Tech | Citigroup vs. Verizon Communications | Citigroup vs. Multilaser Industrial SA | Citigroup vs. Technos SA |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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