Correlation Between Citigroup and Handelsinvest Danske

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

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

Diversification Opportunities for Citigroup and Handelsinvest Danske

0.12

Correlation Coefficient

Citigroup  Handelsinvest Danske

Average diversification

The 3 months correlation between Citigroup and Handelsinvest is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Handelsinvest Danske Obligatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Handelsinvest Danske 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 Handelsinvest Danske. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Handelsinvest Danske has no effect on the direction of Citigroup i.e., Citigroup and Handelsinvest Danske go up and down completely randomly.

Pair Corralation between Citigroup and Handelsinvest Danske

Taking into account the 90-day investment horizon Citigroup is expected to generate 12.61 times more return on investment than Handelsinvest Danske. However, Citigroup is 12.61 times more volatile than Handelsinvest Danske Obligationer. It trades about 0.08 of its potential returns per unit of risk. Handelsinvest Danske Obligationer is currently generating about 0.03 per unit of risk. If you would invest  5,641  in Citigroup on December 10, 2024 and sell it today you would earn a total of  1,100  from holding Citigroup or generate 19.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.19%
Values	Daily Returns

Citigroup  vs.  Handelsinvest Danske Obligatio

Citigroup

Risk-Adjusted Performance

Very Weak

Over the last 90 days Citigroup has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Handelsinvest Danske

Risk-Adjusted Performance

Very Weak

Over the last 90 days Handelsinvest Danske Obligationer has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward-looking signals, Handelsinvest Danske is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Citigroup and Handelsinvest Danske

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

The idea behind Citigroup and Handelsinvest Danske Obligationer 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.