Correlation Between Citigroup and VictoryShares Small
Can any of the company-specific risk be diversified away by investing in both Citigroup and VictoryShares Small 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 Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and VictoryShares Small Mid, you can compare the effects of market volatilities on Citigroup and VictoryShares Small 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 Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and VictoryShares Small.
Diversification Opportunities for Citigroup and VictoryShares Small
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and VictoryShares is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and VictoryShares Small Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VictoryShares Small 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 VictoryShares Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VictoryShares Small Mid has no effect on the direction of Citigroup i.e., Citigroup and VictoryShares Small go up and down completely randomly.
Pair Corralation between Citigroup and VictoryShares Small
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.48 times more return on investment than VictoryShares Small. However, Citigroup is 1.48 times more volatile than VictoryShares Small Mid. It trades about 0.07 of its potential returns per unit of risk. VictoryShares Small Mid is currently generating about 0.08 per unit of risk. If you would invest 4,118 in Citigroup on August 29, 2024 and sell it today you would earn a total of 2,857 from holding Citigroup or generate 69.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. VictoryShares Small Mid
Performance |
| Timeline |
| Citigroup |
| VictoryShares Small Mid |
Citigroup and VictoryShares Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and VictoryShares Small
The main advantage of trading using opposite Citigroup and VictoryShares Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, VictoryShares Small 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 Small will offset losses from the drop in VictoryShares Small's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| VictoryShares Small vs. Dimensional ETF Trust | VictoryShares Small vs. Vanguard Small Cap Index | VictoryShares Small vs. First Trust Multi Manager | VictoryShares Small vs. Vanguard SP Small Cap |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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