Correlation Between Citigroup and Mutares SE
Can any of the company-specific risk be diversified away by investing in both Citigroup and Mutares SE 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 Mutares SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and mutares SE Co, you can compare the effects of market volatilities on Citigroup and Mutares SE 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 Mutares SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Mutares SE.
Diversification Opportunities for Citigroup and Mutares SE
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Mutares is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and mutares SE Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on mutares SE 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 Mutares SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of mutares SE has no effect on the direction of Citigroup i.e., Citigroup and Mutares SE go up and down completely randomly.
Pair Corralation between Citigroup and Mutares SE
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.01 times more return on investment than Mutares SE. However, Citigroup is 1.01 times more volatile than mutares SE Co. It trades about 0.21 of its potential returns per unit of risk. mutares SE Co is currently generating about 0.01 per unit of risk. If you would invest 6,393 in Citigroup on August 31, 2024 and sell it today you would earn a total of 623.00 from holding Citigroup or generate 9.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Citigroup vs. mutares SE Co
Performance |
| Timeline |
| Citigroup |
| mutares SE |
Citigroup and Mutares SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Mutares SE
The main advantage of trading using opposite Citigroup and Mutares SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Mutares SE 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 Mutares SE will offset losses from the drop in Mutares SE's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Mutares SE vs. European Metals Holdings | Mutares SE vs. AMG Advanced Metallurgical | Mutares SE vs. Jacquet Metal Service | Mutares SE vs. Advanced Medical Solutions |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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