Correlation Between Citigroup and DENSO -

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

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

Diversification Opportunities for Citigroup and DENSO -

-0.1

Correlation Coefficient

Citigroup  DENSO -

Good diversification

The 3 months correlation between Citigroup and DENSO is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and DENSO Dusseldorf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DENSO Dusseldorf 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 DENSO -. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DENSO Dusseldorf has no effect on the direction of Citigroup i.e., Citigroup and DENSO - go up and down completely randomly.

Pair Corralation between Citigroup and DENSO -

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.07 times more return on investment than DENSO -. However, Citigroup is 1.07 times more volatile than DENSO Dusseldorf. It trades about 0.04 of its potential returns per unit of risk. DENSO Dusseldorf is currently generating about -0.02 per unit of risk. If you would invest  6,929  in Citigroup on December 21, 2024 and sell it today you would earn a total of  253.00  from holding Citigroup or generate 3.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Citigroup  vs.  DENSO Dusseldorf

Citigroup

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 3 (%) 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 recent stock price tumult, may contribute to shorter-term losses for the shareholders.

DENSO Dusseldorf

Risk-Adjusted Performance

Very Weak

Over the last 90 days DENSO Dusseldorf has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, DENSO - is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Citigroup and DENSO -

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

The idea behind Citigroup and DENSO Dusseldorf 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.