Correlation Between Citigroup and Vy Baron
Can any of the company-specific risk be diversified away by investing in both Citigroup and Vy Baron 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 Vy Baron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Vy Baron Growth, you can compare the effects of market volatilities on Citigroup and Vy Baron 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 Vy Baron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Vy Baron.
Diversification Opportunities for Citigroup and Vy Baron
Poor diversification
The 3 months correlation between Citigroup and IBSAX is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Vy Baron Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vy Baron Growth 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 Vy Baron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vy Baron Growth has no effect on the direction of Citigroup i.e., Citigroup and Vy Baron go up and down completely randomly.
Pair Corralation between Citigroup and Vy Baron
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.52 times more return on investment than Vy Baron. However, Citigroup is 1.52 times more volatile than Vy Baron Growth. It trades about 0.08 of its potential returns per unit of risk. Vy Baron Growth is currently generating about 0.02 per unit of risk. If you would invest 4,091 in Citigroup on September 17, 2024 and sell it today you would earn a total of 3,053 from holding Citigroup or generate 74.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Citigroup vs. Vy Baron Growth
Performance |
| Timeline |
| Citigroup |
| Vy Baron Growth |
Citigroup and Vy Baron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Vy Baron
The main advantage of trading using opposite Citigroup and Vy Baron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Vy Baron 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 Vy Baron will offset losses from the drop in Vy Baron's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Vy Baron vs. Voya Bond Index | Vy Baron vs. Voya Bond Index | Vy Baron vs. Voya Limited Maturity | Vy Baron vs. Voya Limited Maturity |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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