Correlation Between Citigroup and LightInTheBox Holding

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

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

Diversification Opportunities for Citigroup and LightInTheBox Holding

-0.62

Correlation Coefficient

Citigroup  LightInTheBox Holding

Excellent diversification

The 3 months correlation between Citigroup and LightInTheBox is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and LightInTheBox Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LightInTheBox Holding 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 LightInTheBox Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LightInTheBox Holding has no effect on the direction of Citigroup i.e., Citigroup and LightInTheBox Holding go up and down completely randomly.

Pair Corralation between Citigroup and LightInTheBox Holding

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.29 times more return on investment than LightInTheBox Holding. However, Citigroup is 3.45 times less risky than LightInTheBox Holding. It trades about 0.13 of its potential returns per unit of risk. LightInTheBox Holding Co is currently generating about -0.15 per unit of risk. If you would invest  7,038  in Citigroup on November 28, 2024 and sell it today you would earn a total of  869.00  from holding Citigroup or generate 12.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Citigroup  vs.  LightInTheBox Holding Co

Citigroup

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

LightInTheBox Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days LightInTheBox Holding Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Citigroup and LightInTheBox Holding

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

The idea behind Citigroup and LightInTheBox Holding Co 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.