Correlation Between Citigroup and Deutsche Enhanced
Can any of the company-specific risk be diversified away by investing in both Citigroup and Deutsche Enhanced 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 Enhanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Deutsche Enhanced Emerging, you can compare the effects of market volatilities on Citigroup and Deutsche Enhanced 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 Enhanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Deutsche Enhanced.
Diversification Opportunities for Citigroup and Deutsche Enhanced
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citigroup and Deutsche is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Deutsche Enhanced Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Enhanced 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 Enhanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Enhanced has no effect on the direction of Citigroup i.e., Citigroup and Deutsche Enhanced go up and down completely randomly.
Pair Corralation between Citigroup and Deutsche Enhanced
Taking into account the 90-day investment horizon Citigroup is expected to generate 4.61 times more return on investment than Deutsche Enhanced. However, Citigroup is 4.61 times more volatile than Deutsche Enhanced Emerging. It trades about 0.07 of its potential returns per unit of risk. Deutsche Enhanced Emerging is currently generating about 0.12 per unit of risk. If you would invest 4,206 in Citigroup on August 26, 2024 and sell it today you would earn a total of 2,778 from holding Citigroup or generate 66.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Deutsche Enhanced Emerging
Performance |
| Timeline |
| Citigroup |
| Deutsche Enhanced |
Citigroup and Deutsche Enhanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Deutsche Enhanced
The main advantage of trading using opposite Citigroup and Deutsche Enhanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Deutsche Enhanced 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 Enhanced will offset losses from the drop in Deutsche Enhanced's long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
| Deutsche Enhanced vs. Deutsche Gnma Fund | Deutsche Enhanced vs. Deutsche Short Term Municipal | Deutsche Enhanced vs. Deutsche Short Term Municipal | Deutsche Enhanced vs. Deutsche Science And |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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