Correlation Between Citigroup and Vanguard World
Can any of the company-specific risk be diversified away by investing in both Citigroup and Vanguard World 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 World into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Vanguard World, you can compare the effects of market volatilities on Citigroup and Vanguard World 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 World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Vanguard World.
Diversification Opportunities for Citigroup and Vanguard World
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Citigroup and Vanguard is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Vanguard World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard World 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 World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard World has no effect on the direction of Citigroup i.e., Citigroup and Vanguard World go up and down completely randomly.
Pair Corralation between Citigroup and Vanguard World
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.36 times less return on investment than Vanguard World. In addition to that, Citigroup is 1.66 times more volatile than Vanguard World. It trades about 0.07 of its total potential returns per unit of risk. Vanguard World is currently generating about 0.16 per unit of volatility. If you would invest 433,526 in Vanguard World on August 28, 2024 and sell it today you would earn a total of 111,474 from holding Vanguard World or generate 25.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Vanguard World
Performance |
| Timeline |
| Citigroup |
| Vanguard World |
Citigroup and Vanguard World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Vanguard World
The main advantage of trading using opposite Citigroup and Vanguard World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Vanguard World 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 World will offset losses from the drop in Vanguard World's long position.| Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
| Vanguard World vs. Vanguard Index Funds | Vanguard World vs. Vanguard Tax Managed Funds | Vanguard World vs. Vanguard International Equity |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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