Correlation Between Citigroup and Victory Supermarket
Can any of the company-specific risk be diversified away by investing in both Citigroup and Victory Supermarket 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 Supermarket into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Victory Supermarket Chain, you can compare the effects of market volatilities on Citigroup and Victory Supermarket 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 Supermarket. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Victory Supermarket.
Diversification Opportunities for Citigroup and Victory Supermarket
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Victory is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Victory Supermarket Chain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory Supermarket Chain 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 Supermarket. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory Supermarket Chain has no effect on the direction of Citigroup i.e., Citigroup and Victory Supermarket go up and down completely randomly.
Pair Corralation between Citigroup and Victory Supermarket
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.04 times less return on investment than Victory Supermarket. In addition to that, Citigroup is 1.07 times more volatile than Victory Supermarket Chain. It trades about 0.25 of its total potential returns per unit of risk. Victory Supermarket Chain is currently generating about 0.28 per unit of volatility. If you would invest 495,100 in Victory Supermarket Chain on August 28, 2024 and sell it today you would earn a total of 46,600 from holding Victory Supermarket Chain or generate 9.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 80.95% |
| Values | Daily Returns |
Citigroup vs. Victory Supermarket Chain
Performance |
| Timeline |
| Citigroup |
| Victory Supermarket Chain |
Citigroup and Victory Supermarket Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Victory Supermarket
The main advantage of trading using opposite Citigroup and Victory Supermarket positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Victory Supermarket 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 Supermarket will offset losses from the drop in Victory Supermarket's long position.| Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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