Correlation Between Citigroup and Westag Getalit
Can any of the company-specific risk be diversified away by investing in both Citigroup and Westag Getalit 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 Westag Getalit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Westag Getalit AG, you can compare the effects of market volatilities on Citigroup and Westag Getalit 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 Westag Getalit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Westag Getalit.
Diversification Opportunities for Citigroup and Westag Getalit
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and Westag is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Westag Getalit AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westag Getalit AG 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 Westag Getalit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westag Getalit AG has no effect on the direction of Citigroup i.e., Citigroup and Westag Getalit go up and down completely randomly.
Pair Corralation between Citigroup and Westag Getalit
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.26 times more return on investment than Westag Getalit. However, Citigroup is 3.81 times less risky than Westag Getalit. It trades about 0.23 of its potential returns per unit of risk. Westag Getalit AG is currently generating about 0.03 per unit of risk. If you would invest 6,860 in Citigroup on September 20, 2024 and sell it today you would earn a total of 252.00 from holding Citigroup or generate 3.67% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 95.45% |
Values | Daily Returns |
Citigroup vs. Westag Getalit AG
Performance |
Timeline |
Citigroup |
Westag Getalit AG |
Citigroup and Westag Getalit Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Citigroup and Westag Getalit
The main advantage of trading using opposite Citigroup and Westag Getalit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Westag Getalit 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 Westag Getalit will offset losses from the drop in Westag Getalit's long position.Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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