Correlation Between Citigroup and VictoryShares WestEnd
Can any of the company-specific risk be diversified away by investing in both Citigroup and VictoryShares WestEnd 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 VictoryShares WestEnd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and VictoryShares WestEnd Sector, you can compare the effects of market volatilities on Citigroup and VictoryShares WestEnd 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 VictoryShares WestEnd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and VictoryShares WestEnd.
Diversification Opportunities for Citigroup and VictoryShares WestEnd
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and VictoryShares is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and VictoryShares WestEnd Sector in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VictoryShares WestEnd 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 VictoryShares WestEnd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VictoryShares WestEnd has no effect on the direction of Citigroup i.e., Citigroup and VictoryShares WestEnd go up and down completely randomly.
Pair Corralation between Citigroup and VictoryShares WestEnd
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.57 times more return on investment than VictoryShares WestEnd. However, Citigroup is 2.57 times more volatile than VictoryShares WestEnd Sector. It trades about 0.21 of its potential returns per unit of risk. VictoryShares WestEnd Sector is currently generating about 0.2 per unit of risk. If you would invest 6,360 in Citigroup on August 29, 2024 and sell it today you would earn a total of 615.00 from holding Citigroup or generate 9.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. VictoryShares WestEnd Sector
Performance |
| Timeline |
| Citigroup |
| VictoryShares WestEnd |
Citigroup and VictoryShares WestEnd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and VictoryShares WestEnd
The main advantage of trading using opposite Citigroup and VictoryShares WestEnd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, VictoryShares WestEnd 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 VictoryShares WestEnd will offset losses from the drop in VictoryShares WestEnd's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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