Correlation Between Citigroup and Jones Lang

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

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

Diversification Opportunities for Citigroup and Jones Lang

0.15

Correlation Coefficient

Citigroup  Jones Lang

Average diversification

The 3 months correlation between Citigroup and Jones is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Jones Lang Lasalleome in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jones Lang Lasalleome 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 Jones Lang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jones Lang Lasalleome has no effect on the direction of Citigroup i.e., Citigroup and Jones Lang go up and down completely randomly.

Pair Corralation between Citigroup and Jones Lang

Taking into account the 90-day investment horizon Citigroup is expected to generate 4.52 times more return on investment than Jones Lang. However, Citigroup is 4.52 times more volatile than Jones Lang Lasalleome. It trades about 0.1 of its potential returns per unit of risk. Jones Lang Lasalleome is currently generating about -0.22 per unit of risk. If you would invest  7,186  in Citigroup on October 9, 2024 and sell it today you would earn a total of  182.00  from holding Citigroup or generate 2.53% return on investment over 90 days.

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

Citigroup  vs.  Jones Lang Lasalleome

Citigroup

Risk-Adjusted Performance

10 of 100

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.

Jones Lang Lasalleome

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jones Lang Lasalleome has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Jones Lang is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Citigroup and Jones Lang

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

The idea behind Citigroup and Jones Lang Lasalleome 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.