Correlation Between Citigroup and Danske Andelskassers

Can any of the company-specific risk be diversified away by investing in both Citigroup and Danske Andelskassers 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 Danske Andelskassers into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Citigroup and Danske Andelskassers Bank, you can compare the effects of market volatilities on Citigroup and Danske Andelskassers 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 Danske Andelskassers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Danske Andelskassers.

Diversification Opportunities for Citigroup and Danske Andelskassers

-0.69

Correlation Coefficient

Citigroup  Danske Andelskassers

Excellent diversification

The 3 months correlation between Citigroup and Danske is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Danske Andelskassers Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danske Andelskassers Bank 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 Danske Andelskassers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danske Andelskassers Bank has no effect on the direction of Citigroup i.e., Citigroup and Danske Andelskassers go up and down completely randomly.

Pair Corralation between Citigroup and Danske Andelskassers

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.29 times less return on investment than Danske Andelskassers. But when comparing it to its historical volatility, Citigroup is 1.1 times less risky than Danske Andelskassers. It trades about 0.03 of its potential returns per unit of risk. Danske Andelskassers Bank is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,425  in Danske Andelskassers Bank on December 29, 2024 and sell it today you would earn a total of  55.00  from holding Danske Andelskassers Bank or generate 3.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	96.83%
Values	Daily Returns

Citigroup  vs.  Danske Andelskassers Bank

Citigroup

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Citigroup is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Danske Andelskassers Bank

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Danske Andelskassers Bank are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental drivers, Danske Andelskassers is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Citigroup and Danske Andelskassers

The main advantage of trading using opposite Citigroup and Danske Andelskassers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Danske Andelskassers 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 Danske Andelskassers will offset losses from the drop in Danske Andelskassers' long position.

The idea behind Citigroup and Danske Andelskassers Bank pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.