Correlation Between Citigroup and Wacker Neuson
Can any of the company-specific risk be diversified away by investing in both Citigroup and Wacker Neuson 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 Wacker Neuson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Wacker Neuson SE, you can compare the effects of market volatilities on Citigroup and Wacker Neuson 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 Wacker Neuson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Wacker Neuson.
Diversification Opportunities for Citigroup and Wacker Neuson
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Wacker is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Wacker Neuson SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wacker Neuson SE 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 Wacker Neuson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wacker Neuson SE has no effect on the direction of Citigroup i.e., Citigroup and Wacker Neuson go up and down completely randomly.
Pair Corralation between Citigroup and Wacker Neuson
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.94 times more return on investment than Wacker Neuson. However, Citigroup is 1.06 times less risky than Wacker Neuson. It trades about 0.08 of its potential returns per unit of risk. Wacker Neuson SE is currently generating about 0.0 per unit of risk. If you would invest 4,112 in Citigroup on September 5, 2024 and sell it today you would earn a total of 3,030 from holding Citigroup or generate 73.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.82% |
| Values | Daily Returns |
Citigroup vs. Wacker Neuson SE
Performance |
| Timeline |
| Citigroup |
| Wacker Neuson SE |
Citigroup and Wacker Neuson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Wacker Neuson
The main advantage of trading using opposite Citigroup and Wacker Neuson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Wacker Neuson 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 Wacker Neuson will offset losses from the drop in Wacker Neuson's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Wacker Neuson vs. PUBLIC STORAGE PRFO | Wacker Neuson vs. UMC Electronics Co | Wacker Neuson vs. DATAGROUP SE | Wacker Neuson vs. LPKF Laser Electronics |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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