Correlation Between Citigroup and Victory Trivalent
Can any of the company-specific risk be diversified away by investing in both Citigroup and Victory Trivalent 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 Victory Trivalent into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Victory Trivalent International, you can compare the effects of market volatilities on Citigroup and Victory Trivalent 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 Victory Trivalent. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Victory Trivalent.
Diversification Opportunities for Citigroup and Victory Trivalent
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Victory is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Victory Trivalent Internationa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory Trivalent 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 Victory Trivalent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory Trivalent has no effect on the direction of Citigroup i.e., Citigroup and Victory Trivalent go up and down completely randomly.
Pair Corralation between Citigroup and Victory Trivalent
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.93 times more return on investment than Victory Trivalent. However, Citigroup is 1.93 times more volatile than Victory Trivalent International. It trades about 0.07 of its potential returns per unit of risk. Victory Trivalent International is currently generating about 0.04 per unit of risk. If you would invest 4,684 in Citigroup on November 27, 2024 and sell it today you would earn a total of 3,005 from holding Citigroup or generate 64.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Citigroup vs. Victory Trivalent Internationa
Performance |
| Timeline |
| Citigroup |
| Victory Trivalent |
Citigroup and Victory Trivalent Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Victory Trivalent
The main advantage of trading using opposite Citigroup and Victory Trivalent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Victory Trivalent 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 Victory Trivalent will offset losses from the drop in Victory Trivalent's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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