Correlation Between Citigroup and Nordea Bank
Can any of the company-specific risk be diversified away by investing in both Citigroup and Nordea Bank 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 Nordea Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Nordea Bank Abp, you can compare the effects of market volatilities on Citigroup and Nordea Bank 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 Nordea Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Nordea Bank.
Diversification Opportunities for Citigroup and Nordea Bank
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Nordea is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Nordea Bank Abp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordea Bank Abp 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 Nordea Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordea Bank Abp has no effect on the direction of Citigroup i.e., Citigroup and Nordea Bank go up and down completely randomly.
Pair Corralation between Citigroup and Nordea Bank
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.75 times more return on investment than Nordea Bank. However, Citigroup is 1.75 times more volatile than Nordea Bank Abp. It trades about 0.26 of its potential returns per unit of risk. Nordea Bank Abp is currently generating about -0.18 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 Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Nordea Bank Abp
Performance |
| Timeline |
| Citigroup |
| Nordea Bank Abp |
Citigroup and Nordea Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Nordea Bank
The main advantage of trading using opposite Citigroup and Nordea Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Nordea Bank 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 Nordea Bank will offset losses from the drop in Nordea Bank's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Nordea Bank vs. Piraeus Bank SA | Nordea Bank vs. Turkiye Garanti Bankasi | Nordea Bank vs. Delhi Bank Corp | Nordea Bank vs. Uwharrie Capital Corp |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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