Correlation Between Citigroup and Bayer AG
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By analyzing existing cross correlation between Citigroup and Bayer AG NA, you can compare the effects of market volatilities on Citigroup and Bayer AG 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 Bayer AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Bayer AG.
Diversification Opportunities for Citigroup and Bayer AG
Pay attention - limited upside
The 3 months correlation between Citigroup and Bayer is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Bayer AG NA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bayer AG NA 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 Bayer AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bayer AG NA has no effect on the direction of Citigroup i.e., Citigroup and Bayer AG go up and down completely randomly.
Pair Corralation between Citigroup and Bayer AG
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.75 times more return on investment than Bayer AG. However, Citigroup is 1.34 times less risky than Bayer AG. It trades about 0.17 of its potential returns per unit of risk. Bayer AG NA is currently generating about -0.2 per unit of risk. If you would invest 5,877 in Citigroup on September 17, 2024 and sell it today you would earn a total of 1,272 from holding Citigroup or generate 21.64% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Citigroup vs. Bayer AG NA
Performance |
Timeline |
Citigroup |
Bayer AG NA |
Citigroup and Bayer AG Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Citigroup and Bayer AG
The main advantage of trading using opposite Citigroup and Bayer AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Bayer AG 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 Bayer AG will offset losses from the drop in Bayer AG's long position.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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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