Correlation Between Citigroup and Deutsche Equity
Can any of the company-specific risk be diversified away by investing in both Citigroup and Deutsche Equity 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 Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Deutsche Equity 500, you can compare the effects of market volatilities on Citigroup and Deutsche Equity 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 Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Deutsche Equity.
Diversification Opportunities for Citigroup and Deutsche Equity
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and Deutsche is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Deutsche Equity 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Equity 500 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 Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Equity 500 has no effect on the direction of Citigroup i.e., Citigroup and Deutsche Equity go up and down completely randomly.
Pair Corralation between Citigroup and Deutsche Equity
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.82 times more return on investment than Deutsche Equity. However, Citigroup is 2.82 times more volatile than Deutsche Equity 500. It trades about 0.26 of its potential returns per unit of risk. Deutsche Equity 500 is currently generating about 0.37 per unit of risk. If you would invest 6,361 in Citigroup on September 1, 2024 and sell it today you would earn a total of 726.00 from holding Citigroup or generate 11.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Deutsche Equity 500
Performance |
| Timeline |
| Citigroup |
| Deutsche Equity 500 |
Citigroup and Deutsche Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Deutsche Equity
The main advantage of trading using opposite Citigroup and Deutsche Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Deutsche Equity 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 Equity will offset losses from the drop in Deutsche Equity's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Deutsche Equity vs. Deutsche Croci Equity | Deutsche Equity vs. Deutsche Real Estate | Deutsche Equity vs. Bts Managed Income | Deutsche Equity vs. Deutsche Capital Growth |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Stocks Directory Find actively traded stocks across global markets | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |