Correlation Between Citigroup and Deutsche Bank
Can any of the company-specific risk be diversified away by investing in both Citigroup and Deutsche Bank 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 Deutsche Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Deutsche Bank Aktiengesellschaft, you can compare the effects of market volatilities on Citigroup and Deutsche Bank 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 Deutsche Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Deutsche Bank.
Diversification Opportunities for Citigroup and Deutsche Bank
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citigroup and Deutsche is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Deutsche Bank Aktiengesellscha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Bank Aktien 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 Deutsche Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Bank Aktien has no effect on the direction of Citigroup i.e., Citigroup and Deutsche Bank go up and down completely randomly.
Pair Corralation between Citigroup and Deutsche Bank
Given the investment horizon of 90 days Citigroup is expected to generate 1.58 times more return on investment than Deutsche Bank. However, Citigroup is 1.58 times more volatile than Deutsche Bank Aktiengesellschaft. It trades about 0.26 of its potential returns per unit of risk. Deutsche Bank Aktiengesellschaft is currently generating about 0.03 per unit of risk. If you would invest 126,609 in Citigroup on September 4, 2024 and sell it today you would earn a total of 18,579 from holding Citigroup or generate 14.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 80.95% |
| Values | Daily Returns |
Citigroup vs. Deutsche Bank Aktiengesellscha
Performance |
| Timeline |
| Citigroup |
| Deutsche Bank Aktien |
Citigroup and Deutsche Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Deutsche Bank
The main advantage of trading using opposite Citigroup and Deutsche Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Deutsche Bank 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 Deutsche Bank will offset losses from the drop in Deutsche Bank's long position.| Citigroup vs. Capital One Financial | Citigroup vs. Ameriprise Financial | Citigroup vs. Deutsche Bank Aktiengesellschaft | Citigroup vs. New Oriental Education |
| Deutsche Bank vs. Applied Materials | Deutsche Bank vs. Monster Beverage Corp | Deutsche Bank vs. McEwen Mining | Deutsche Bank vs. Southwest Airlines |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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