Correlation Between Citigroup and Victory Munder
Can any of the company-specific risk be diversified away by investing in both Citigroup and Victory Munder 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 Munder into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Victory Munder Mid Cap, you can compare the effects of market volatilities on Citigroup and Victory Munder 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 Munder. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Victory Munder.
Diversification Opportunities for Citigroup and Victory Munder
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Citigroup and Victory is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Victory Munder Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory Munder Mid 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 Munder. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory Munder Mid has no effect on the direction of Citigroup i.e., Citigroup and Victory Munder go up and down completely randomly.
Pair Corralation between Citigroup and Victory Munder
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.19 times more return on investment than Victory Munder. However, Citigroup is 2.19 times more volatile than Victory Munder Mid Cap. It trades about 0.33 of its potential returns per unit of risk. Victory Munder Mid Cap is currently generating about 0.36 per unit of risk. If you would invest 6,235 in Citigroup on September 3, 2024 and sell it today you would earn a total of 904.00 from holding Citigroup or generate 14.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Victory Munder Mid Cap
Performance |
| Timeline |
| Citigroup |
| Victory Munder Mid |
Citigroup and Victory Munder Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Victory Munder
The main advantage of trading using opposite Citigroup and Victory Munder positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Victory Munder 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 Munder will offset losses from the drop in Victory Munder's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Victory Munder vs. T Rowe Price | Victory Munder vs. T Rowe Price | Victory Munder vs. T Rowe Price | Victory Munder vs. T Rowe Price |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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