Correlation Between Citigroup and Dampskibsselskabet
Can any of the company-specific risk be diversified away by investing in both Citigroup and Dampskibsselskabet 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 Dampskibsselskabet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Dampskibsselskabet Norden AS, you can compare the effects of market volatilities on Citigroup and Dampskibsselskabet 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 Dampskibsselskabet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Dampskibsselskabet.
Diversification Opportunities for Citigroup and Dampskibsselskabet
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and Dampskibsselskabet is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Dampskibsselskabet Norden AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dampskibsselskabet 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 Dampskibsselskabet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dampskibsselskabet has no effect on the direction of Citigroup i.e., Citigroup and Dampskibsselskabet go up and down completely randomly.
Pair Corralation between Citigroup and Dampskibsselskabet
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.73 times more return on investment than Dampskibsselskabet. However, Citigroup is 1.38 times less risky than Dampskibsselskabet. It trades about 0.08 of its potential returns per unit of risk. Dampskibsselskabet Norden AS is currently generating about -0.03 per unit of risk. If you would invest 4,362 in Citigroup on August 29, 2024 and sell it today you would earn a total of 2,613 from holding Citigroup or generate 59.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Dampskibsselskabet Norden AS
Performance |
| Timeline |
| Citigroup |
| Dampskibsselskabet |
Citigroup and Dampskibsselskabet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Dampskibsselskabet
The main advantage of trading using opposite Citigroup and Dampskibsselskabet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Dampskibsselskabet 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 Dampskibsselskabet will offset losses from the drop in Dampskibsselskabet's long position.The idea behind Citigroup and Dampskibsselskabet Norden AS 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.| Dampskibsselskabet vs. North Media AS | Dampskibsselskabet vs. HH International AS | Dampskibsselskabet vs. Per Aarsleff Holding | Dampskibsselskabet vs. First Farms AS |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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