Correlation Between Citigroup and HANNRUECKVSE ADR
Can any of the company-specific risk be diversified away by investing in both Citigroup and HANNRUECKVSE ADR 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 HANNRUECKVSE ADR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and HANNRUECKVSE ADR 12ON, you can compare the effects of market volatilities on Citigroup and HANNRUECKVSE ADR 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 HANNRUECKVSE ADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and HANNRUECKVSE ADR.
Diversification Opportunities for Citigroup and HANNRUECKVSE ADR
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and HANNRUECKVSE is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and HANNRUECKVSE ADR 12ON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HANNRUECKVSE ADR 12ON 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 HANNRUECKVSE ADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HANNRUECKVSE ADR 12ON has no effect on the direction of Citigroup i.e., Citigroup and HANNRUECKVSE ADR go up and down completely randomly.
Pair Corralation between Citigroup and HANNRUECKVSE ADR
Taking into account the 90-day investment horizon Citigroup is expected to under-perform the HANNRUECKVSE ADR. In addition to that, Citigroup is 1.05 times more volatile than HANNRUECKVSE ADR 12ON. It trades about -0.12 of its total potential returns per unit of risk. HANNRUECKVSE ADR 12ON is currently generating about -0.07 per unit of volatility. If you would invest 4,220 in HANNRUECKVSE ADR 12ON on November 27, 2024 and sell it today you would lose (120.00) from holding HANNRUECKVSE ADR 12ON or give up 2.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. HANNRUECKVSE ADR 12ON
Performance |
| Timeline |
| Citigroup |
| HANNRUECKVSE ADR 12ON |
Citigroup and HANNRUECKVSE ADR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and HANNRUECKVSE ADR
The main advantage of trading using opposite Citigroup and HANNRUECKVSE ADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, HANNRUECKVSE ADR 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 HANNRUECKVSE ADR will offset losses from the drop in HANNRUECKVSE ADR's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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