Correlation Between Citigroup and Laboratorio Reig
Can any of the company-specific risk be diversified away by investing in both Citigroup and Laboratorio Reig 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 Laboratorio Reig into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Laboratorio Reig Jofre, you can compare the effects of market volatilities on Citigroup and Laboratorio Reig 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 Laboratorio Reig. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Laboratorio Reig.
Diversification Opportunities for Citigroup and Laboratorio Reig
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Laboratorio is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Laboratorio Reig Jofre in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Laboratorio Reig Jofre 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 Laboratorio Reig. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Laboratorio Reig Jofre has no effect on the direction of Citigroup i.e., Citigroup and Laboratorio Reig go up and down completely randomly.
Pair Corralation between Citigroup and Laboratorio Reig
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.6 times more return on investment than Laboratorio Reig. However, Citigroup is 1.66 times less risky than Laboratorio Reig. It trades about 0.58 of its potential returns per unit of risk. Laboratorio Reig Jofre is currently generating about 0.07 per unit of risk. If you would invest 5,571 in Citigroup on December 29, 2023 and sell it today you would earn a total of 753.00 from holding Citigroup or generate 13.52% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Citigroup vs. Laboratorio Reig Jofre
Performance |
Timeline |
Citigroup |
Laboratorio Reig Jofre |
Citigroup and Laboratorio Reig Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Citigroup and Laboratorio Reig
The main advantage of trading using opposite Citigroup and Laboratorio Reig positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Laboratorio Reig 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 Laboratorio Reig will offset losses from the drop in Laboratorio Reig's long position.Citigroup vs. Bank Of America | Citigroup vs. Deckers Outdoor | Citigroup vs. Intuitive Machines | Citigroup vs. Liberty Interactive LLC |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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