Correlation Between Citigroup and Voya Global
Can any of the company-specific risk be diversified away by investing in both Citigroup and Voya Global 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 Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Voya Global Equity, you can compare the effects of market volatilities on Citigroup and Voya Global 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 Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Voya Global.
Diversification Opportunities for Citigroup and Voya Global
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and Voya is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Voya Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Global Equity 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 Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Global Equity has no effect on the direction of Citigroup i.e., Citigroup and Voya Global go up and down completely randomly.
Pair Corralation between Citigroup and Voya Global
Taking into account the 90-day investment horizon Citigroup is expected to generate 3.26 times more return on investment than Voya Global. However, Citigroup is 3.26 times more volatile than Voya Global Equity. It trades about 0.07 of its potential returns per unit of risk. Voya Global Equity is currently generating about 0.15 per unit of risk. If you would invest 6,117 in Citigroup on August 29, 2024 and sell it today you would earn a total of 899.00 from holding Citigroup or generate 14.7% 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 Global Equity
Performance |
| Timeline |
| Citigroup |
| Voya Global Equity |
Citigroup and Voya Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Voya Global
The main advantage of trading using opposite Citigroup and Voya Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Voya Global 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 Global will offset losses from the drop in Voya Global'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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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