Correlation Between Citigroup and Hamilton Lane

By analyzing existing cross correlation between Citigroup and Hamilton Lane Private, you can compare the effects of market volatilities on Citigroup and Hamilton Lane 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 Hamilton Lane. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Hamilton Lane.

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Can any of the company-specific risk be diversified away by investing in both Citigroup and Hamilton Lane 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 Hamilton Lane into the same portfolio, which is an essential part of the fundamental portfolio management process.

Diversification Opportunities for Citigroup and Hamilton Lane

0.0
  Correlation Coefficient
Citigroup
Hamilton Lane Private

Pay attention - limited upside

The 3 months correlation between Citigroup and Hamilton is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Hamilton Lane Private in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Hamilton Lane Private 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 Hamilton Lane. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hamilton Lane Private has no effect on the direction of Citigroup i.e., Citigroup and Hamilton Lane go up and down completely randomly.

Pair Corralation between Citigroup and Hamilton Lane

If you would invest  5,700  in Citigroup on September 8, 2021 and sell it today you would earn a total of  592.00  from holding Citigroup or generate 10.39% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Citigroup  vs.  Hamilton Lane Private

 Performance (%) 
      Timeline 
Citigroup 
Citigroup Performance
0 of 100
Over the last 90 days Citigroup has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Citigroup Price Channel

Hamilton Lane Private 
Hamilton Performance
0 of 100
Over the last 90 days Hamilton Lane Private has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Hamilton Lane is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Citigroup and Hamilton Lane Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Citigroup and Hamilton Lane

The main advantage of trading using opposite Citigroup and Hamilton Lane positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Hamilton Lane 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 Hamilton Lane will offset losses from the drop in Hamilton Lane's long position.

Citigroup

Pair trading matchups for Citigroup

The idea behind Citigroup and Hamilton Lane Private 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.

Hamilton Lane Private

Pair trading matchups for Hamilton Lane

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The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against Hamilton Lane as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. Hamilton Lane's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, Hamilton Lane's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to Hamilton Lane Private.
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 Watchlist Optimization module to optimize watchlists to build efficient portfolio or rebalance existing positions based on mean-variance optimization algorithm.

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