Correlation Between Citigroup and Vanguard Short-term
Can any of the company-specific risk be diversified away by investing in both Citigroup and Vanguard Short-term 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 Vanguard Short-term into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Vanguard Short Term Treasury, you can compare the effects of market volatilities on Citigroup and Vanguard Short-term 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 Vanguard Short-term. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Vanguard Short-term.
Diversification Opportunities for Citigroup and Vanguard Short-term
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and Vanguard is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Vanguard Short Term Treasury in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Short Term 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 Vanguard Short-term. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Short Term has no effect on the direction of Citigroup i.e., Citigroup and Vanguard Short-term go up and down completely randomly.
Pair Corralation between Citigroup and Vanguard Short-term
Taking into account the 90-day investment horizon Citigroup is expected to generate 14.66 times more return on investment than Vanguard Short-term. However, Citigroup is 14.66 times more volatile than Vanguard Short Term Treasury. It trades about 0.15 of its potential returns per unit of risk. Vanguard Short Term Treasury is currently generating about -0.16 per unit of risk. If you would invest 6,205 in Citigroup on August 31, 2024 and sell it today you would earn a total of 811.00 from holding Citigroup or generate 13.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Vanguard Short Term Treasury
Performance |
| Timeline |
| Citigroup |
| Vanguard Short Term |
Citigroup and Vanguard Short-term Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Vanguard Short-term
The main advantage of trading using opposite Citigroup and Vanguard Short-term positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Vanguard Short-term 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 Vanguard Short-term will offset losses from the drop in Vanguard Short-term'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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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