Correlation Between Citigroup and Deutsche Communications
Can any of the company-specific risk be diversified away by investing in both Citigroup and Deutsche Communications 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 Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Deutsche Munications Fund, you can compare the effects of market volatilities on Citigroup and Deutsche Communications 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 Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Deutsche Communications.
Diversification Opportunities for Citigroup and Deutsche Communications
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Citigroup and DEUTSCHE is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Deutsche Munications Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Communications 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 Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Communications has no effect on the direction of Citigroup i.e., Citigroup and Deutsche Communications go up and down completely randomly.
Pair Corralation between Citigroup and Deutsche Communications
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.35 times more return on investment than Deutsche Communications. However, Citigroup is 2.35 times more volatile than Deutsche Munications Fund. It trades about 0.32 of its potential returns per unit of risk. Deutsche Munications Fund is currently generating about 0.4 per unit of risk. If you would invest 6,235 in Citigroup on September 3, 2024 and sell it today you would earn a total of 852.00 from holding Citigroup or generate 13.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.0% |
| Values | Daily Returns |
Citigroup vs. Deutsche Munications Fund
Performance |
| Timeline |
| Citigroup |
| Deutsche Communications |
Citigroup and Deutsche Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Deutsche Communications
The main advantage of trading using opposite Citigroup and Deutsche Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Deutsche Communications 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 Communications will offset losses from the drop in Deutsche Communications' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |