Correlation Between Citigroup and VanEck Green
Can any of the company-specific risk be diversified away by investing in both Citigroup and VanEck Green 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 VanEck Green into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and VanEck Green Bond, you can compare the effects of market volatilities on Citigroup and VanEck Green 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 VanEck Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and VanEck Green.
Diversification Opportunities for Citigroup and VanEck Green
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and VanEck is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and VanEck Green Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Green Bond 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 VanEck Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Green Bond has no effect on the direction of Citigroup i.e., Citigroup and VanEck Green go up and down completely randomly.
Pair Corralation between Citigroup and VanEck Green
Taking into account the 90-day investment horizon Citigroup is expected to generate 5.2 times more return on investment than VanEck Green. However, Citigroup is 5.2 times more volatile than VanEck Green Bond. It trades about 0.06 of its potential returns per unit of risk. VanEck Green Bond is currently generating about 0.06 per unit of risk. If you would invest 4,353 in Citigroup on August 23, 2024 and sell it today you would earn a total of 2,542 from holding Citigroup or generate 58.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. VanEck Green Bond
Performance |
| Timeline |
| Citigroup |
| VanEck Green Bond |
Citigroup and VanEck Green Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and VanEck Green
The main advantage of trading using opposite Citigroup and VanEck Green positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, VanEck Green 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 VanEck Green will offset losses from the drop in VanEck Green's long position.| Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Royal Bank of | Citigroup vs. JPMorgan Chase Co |
| VanEck Green vs. iShares USD Green | VanEck Green vs. First Trust California | VanEck Green vs. Great Southern Bancorp | VanEck Green vs. VanEck China Bond |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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