Correlation Between Royal Unibrew and Citigroup
Can any of the company-specific risk be diversified away by investing in both Royal Unibrew 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 Royal Unibrew and Citigroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Royal Unibrew AS and Citigroup, you can compare the effects of market volatilities on Royal Unibrew 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 Royal Unibrew with a short position of Citigroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Royal Unibrew and Citigroup.
Diversification Opportunities for Royal Unibrew and Citigroup
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Royal and Citigroup is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Royal Unibrew AS and Citigroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citigroup and Royal Unibrew 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 Royal Unibrew AS 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 Royal Unibrew i.e., Royal Unibrew and Citigroup go up and down completely randomly.
Pair Corralation between Royal Unibrew and Citigroup
Assuming the 90 days trading horizon Royal Unibrew AS is expected to generate 2.69 times more return on investment than Citigroup. However, Royal Unibrew is 2.69 times more volatile than Citigroup. It trades about 0.21 of its potential returns per unit of risk. Citigroup is currently generating about 0.05 per unit of risk. If you would invest 44,880 in Royal Unibrew AS on January 26, 2024 and sell it today you would earn a total of 8,020 from holding Royal Unibrew AS or generate 17.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Royal Unibrew AS vs. Citigroup
Performance |
| Timeline |
| Royal Unibrew AS |
| Citigroup |
Royal Unibrew and Citigroup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Royal Unibrew and Citigroup
The main advantage of trading using opposite Royal Unibrew and Citigroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Royal Unibrew 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.| Royal Unibrew vs. ROCKWOOL International AS | Royal Unibrew vs. Tryg AS | Royal Unibrew vs. DSV Panalpina AS | Royal Unibrew vs. GN Store Nord |
| 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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