Correlation Between Citigroup and Voya Retirement
Can any of the company-specific risk be diversified away by investing in both Citigroup and Voya Retirement 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 Voya Retirement into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Voya Retirement Moderate, you can compare the effects of market volatilities on Citigroup and Voya Retirement 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 Voya Retirement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Voya Retirement.
Diversification Opportunities for Citigroup and Voya Retirement
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and Voya is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Voya Retirement Moderate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Retirement Moderate 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 Voya Retirement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Retirement Moderate has no effect on the direction of Citigroup i.e., Citigroup and Voya Retirement go up and down completely randomly.
Pair Corralation between Citigroup and Voya Retirement
Taking into account the 90-day investment horizon Citigroup is expected to generate 3.38 times more return on investment than Voya Retirement. However, Citigroup is 3.38 times more volatile than Voya Retirement Moderate. It trades about 0.1 of its potential returns per unit of risk. Voya Retirement Moderate is currently generating about 0.12 per unit of risk. If you would invest 4,910 in Citigroup on September 14, 2024 and sell it today you would earn a total of 2,210 from holding Citigroup or generate 45.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Voya Retirement Moderate
Performance |
| Timeline |
| Citigroup |
| Voya Retirement Moderate |
Citigroup and Voya Retirement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Voya Retirement
The main advantage of trading using opposite Citigroup and Voya Retirement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Voya Retirement 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 Voya Retirement will offset losses from the drop in Voya Retirement's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Voya Retirement vs. Voya Bond Index | Voya Retirement vs. Voya Bond Index | Voya Retirement vs. Voya Limited Maturity | Voya Retirement 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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