Correlation Between Citigroup and GRENKELEASING Dusseldorf

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

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

Diversification Opportunities for Citigroup and GRENKELEASING Dusseldorf

0.48

Correlation Coefficient

Citigroup  GRENKELEASING Dusseldorf

Very weak diversification

The 3 months correlation between Citigroup and GRENKELEASING is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and GRENKELEASING Dusseldorf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GRENKELEASING 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 GRENKELEASING Dusseldorf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GRENKELEASING Dusseldorf has no effect on the direction of Citigroup i.e., Citigroup and GRENKELEASING Dusseldorf go up and down completely randomly.

Pair Corralation between Citigroup and GRENKELEASING Dusseldorf

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.66 times more return on investment than GRENKELEASING Dusseldorf. However, Citigroup is 1.51 times less risky than GRENKELEASING Dusseldorf. It trades about 0.02 of its potential returns per unit of risk. GRENKELEASING Dusseldorf is currently generating about -0.03 per unit of risk. If you would invest  7,086  in Citigroup on December 25, 2024 and sell it today you would earn a total of  112.00  from holding Citigroup or generate 1.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

Citigroup  vs.  GRENKELEASING Dusseldorf

Citigroup

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 1 (%) 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.

GRENKELEASING Dusseldorf

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Citigroup and GRENKELEASING Dusseldorf

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

The idea behind Citigroup and GRENKELEASING 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.

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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.