Correlation Between Citigroup and Münchener Rück
Can any of the company-specific risk be diversified away by investing in both Citigroup and Münchener Rück 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 Münchener Rück into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Mnchener Rck AG, you can compare the effects of market volatilities on Citigroup and Münchener Rück 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 Münchener Rück. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Münchener Rück.
Diversification Opportunities for Citigroup and Münchener Rück
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Citigroup and Münchener is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Mnchener Rck AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mnchener Rck 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 Münchener Rück. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mnchener Rck AG has no effect on the direction of Citigroup i.e., Citigroup and Münchener Rück go up and down completely randomly.
Pair Corralation between Citigroup and Münchener Rück
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.31 times more return on investment than Münchener Rück. However, Citigroup is 1.31 times more volatile than Mnchener Rck AG. It trades about 0.08 of its potential returns per unit of risk. Mnchener Rck AG is currently generating about 0.1 per unit of risk. If you would invest 4,525 in Citigroup on August 31, 2024 and sell it today you would earn a total of 2,562 from holding Citigroup or generate 56.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.16% |
| Values | Daily Returns |
Citigroup vs. Mnchener Rck AG
Performance |
| Timeline |
| Citigroup |
| Mnchener Rck AG |
Citigroup and Münchener Rück Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Münchener Rück
The main advantage of trading using opposite Citigroup and Münchener Rück positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Münchener Rück 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 Münchener Rück will offset losses from the drop in Münchener Rück's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Münchener Rück vs. RETAIL FOOD GROUP | Münchener Rück vs. CarsalesCom | Münchener Rück vs. Calibre Mining Corp | Münchener Rück vs. GRIFFIN MINING LTD |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Stocks Directory Find actively traded stocks across global markets | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |