Correlation Between DKINVO and Citigroup
Can any of the company-specific risk be diversified away by investing in both DKINVO 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 DKINVO and Citigroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Investeringsforeningen Danske Invest and Citigroup, you can compare the effects of market volatilities on DKINVO 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 DKINVO with a short position of Citigroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of DKINVO and Citigroup.
Diversification Opportunities for DKINVO and Citigroup
Poor diversification
The 3 months correlation between DKINVO and Citigroup is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Investeringsforeningen Danske and Citigroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citigroup and DKINVO 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 Investeringsforeningen Danske Invest 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 DKINVO i.e., DKINVO and Citigroup go up and down completely randomly.
Pair Corralation between DKINVO and Citigroup
Assuming the 90 days trading horizon Investeringsforeningen Danske Invest is expected to under-perform the Citigroup. But the stock apears to be less risky and, when comparing its historical volatility, Investeringsforeningen Danske Invest is 12.91 times less risky than Citigroup. The stock trades about -0.05 of its potential returns per unit of risk. The Citigroup is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 6,166 in Citigroup on January 26, 2024 and sell it today you would earn a total of 81.00 from holding Citigroup or generate 1.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Investeringsforeningen Danske vs. Citigroup
Performance |
| Timeline |
| Investeringsforeningen |
| Citigroup |
DKINVO and Citigroup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DKINVO and Citigroup
The main advantage of trading using opposite DKINVO and Citigroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DKINVO 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.The idea behind Investeringsforeningen Danske Invest and Citigroup 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.| Citigroup vs. Wells Fargo | Citigroup vs. Aquagold International | Citigroup vs. Thrivent High Yield | Citigroup vs. Morningstar Unconstrained Allocation |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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