Correlation Between Citigroup and Victory Integrity
Can any of the company-specific risk be diversified away by investing in both Citigroup and Victory Integrity 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 Integrity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Victory Integrity Small Cap, you can compare the effects of market volatilities on Citigroup and Victory Integrity 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 Integrity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Victory Integrity.
Diversification Opportunities for Citigroup and Victory Integrity
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and Victory is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Victory Integrity Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory Integrity Small 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 Integrity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory Integrity Small has no effect on the direction of Citigroup i.e., Citigroup and Victory Integrity go up and down completely randomly.
Pair Corralation between Citigroup and Victory Integrity
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.31 times more return on investment than Victory Integrity. However, Citigroup is 1.31 times more volatile than Victory Integrity Small Cap. It trades about 0.11 of its potential returns per unit of risk. Victory Integrity Small Cap is currently generating about 0.04 per unit of risk. If you would invest 4,567 in Citigroup on August 29, 2024 and sell it today you would earn a total of 2,408 from holding Citigroup or generate 52.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.6% |
| Values | Daily Returns |
Citigroup vs. Victory Integrity Small Cap
Performance |
| Timeline |
| Citigroup |
| Victory Integrity Small |
Citigroup and Victory Integrity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Victory Integrity
The main advantage of trading using opposite Citigroup and Victory Integrity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Victory Integrity 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 Integrity will offset losses from the drop in Victory Integrity'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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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