Correlation Between Citigroup and HIAG Immobilien

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

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

Diversification Opportunities for Citigroup and HIAG Immobilien

-0.03

Correlation Coefficient

Citigroup  HIAG Immobilien

Good diversification

The 3 months correlation between Citigroup and HIAG is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and HIAG Immobilien Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HIAG Immobilien Holding 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 HIAG Immobilien. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HIAG Immobilien Holding has no effect on the direction of Citigroup i.e., Citigroup and HIAG Immobilien go up and down completely randomly.

Pair Corralation between Citigroup and HIAG Immobilien

Taking into account the 90-day investment horizon Citigroup is expected to generate 2.34 times less return on investment than HIAG Immobilien. In addition to that, Citigroup is 1.85 times more volatile than HIAG Immobilien Holding. It trades about 0.04 of its total potential returns per unit of risk. HIAG Immobilien Holding is currently generating about 0.18 per unit of volatility. If you would invest  8,400  in HIAG Immobilien Holding on December 20, 2024 and sell it today you would earn a total of  1,000.00  from holding HIAG Immobilien Holding or generate 11.9% return on investment over 90 days.

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

Citigroup  vs.  HIAG Immobilien Holding

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.

HIAG Immobilien Holding

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in HIAG Immobilien Holding are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, HIAG Immobilien may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Citigroup and HIAG Immobilien

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

The idea behind Citigroup and HIAG Immobilien Holding 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 Global Correlations module to find global opportunities by holding instruments from different markets.