Correlation Between Citigroup and Deutsche Boerse
Can any of the company-specific risk be diversified away by investing in both Citigroup and Deutsche Boerse 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 Boerse into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Deutsche Boerse AG, you can compare the effects of market volatilities on Citigroup and Deutsche Boerse 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 Boerse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Deutsche Boerse.
Diversification Opportunities for Citigroup and Deutsche Boerse
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Deutsche is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Deutsche Boerse AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Boerse AG 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 Boerse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Boerse AG has no effect on the direction of Citigroup i.e., Citigroup and Deutsche Boerse go up and down completely randomly.
Pair Corralation between Citigroup and Deutsche Boerse
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.7 times more return on investment than Deutsche Boerse. However, Citigroup is 1.7 times more volatile than Deutsche Boerse AG. It trades about 0.23 of its potential returns per unit of risk. Deutsche Boerse AG is currently generating about -0.17 per unit of risk. If you would invest 6,360 in Citigroup on August 27, 2024 and sell it today you would earn a total of 624.00 from holding Citigroup or generate 9.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Deutsche Boerse AG
Performance |
| Timeline |
| Citigroup |
| Deutsche Boerse AG |
Citigroup and Deutsche Boerse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Deutsche Boerse
The main advantage of trading using opposite Citigroup and Deutsche Boerse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Deutsche Boerse 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 Boerse will offset losses from the drop in Deutsche Boerse's long position.| Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
| Deutsche Boerse vs. London Stock Exchange | Deutsche Boerse vs. Hong Kong Exchanges | Deutsche Boerse vs. Deutsche Brse AG | Deutsche Boerse vs. Singapore Exchange Limited |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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