Correlation Between Danske Invest and Citigroup
Can any of the company-specific risk be diversified away by investing in both Danske Invest and Citigroup 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 Danske Invest and Citigroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Danske Invest Kina and Citigroup, you can compare the effects of market volatilities on Danske Invest and Citigroup 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 Danske Invest with a short position of Citigroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Danske Invest and Citigroup.
Diversification Opportunities for Danske Invest and Citigroup
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Danske and Citigroup is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Danske Invest Kina and Citigroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citigroup and Danske Invest 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 Danske Invest Kina are associated (or correlated) with Citigroup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citigroup has no effect on the direction of Danske Invest i.e., Danske Invest and Citigroup go up and down completely randomly.
Pair Corralation between Danske Invest and Citigroup
Assuming the 90 days trading horizon Danske Invest Kina is expected to generate 0.78 times more return on investment than Citigroup. However, Danske Invest Kina is 1.29 times less risky than Citigroup. It trades about 0.14 of its potential returns per unit of risk. Citigroup is currently generating about 0.08 per unit of risk. If you would invest 9,680 in Danske Invest Kina on January 25, 2024 and sell it today you would earn a total of 340.00 from holding Danske Invest Kina or generate 3.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Danske Invest Kina vs. Citigroup
Performance |
| Timeline |
| Danske Invest Kina |
| Citigroup |
Danske Invest and Citigroup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Danske Invest and Citigroup
The main advantage of trading using opposite Danske Invest and Citigroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Danske Invest position performs unexpectedly, Citigroup 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 Citigroup will offset losses from the drop in Citigroup's long position.| Danske Invest vs. Novo Nordisk AS | Danske Invest vs. Nordea Bank Abp | Danske Invest vs. DSV Panalpina AS | Danske Invest vs. AP Mller |
| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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