Correlation Between Citigroup and Value Line
Can any of the company-specific risk be diversified away by investing in both Citigroup and Value Line 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 Value Line into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Value Line Asset, you can compare the effects of market volatilities on Citigroup and Value Line 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 Value Line. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Value Line.
Diversification Opportunities for Citigroup and Value Line
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Value is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Value Line Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Value Line Asset 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 Value Line. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Value Line Asset has no effect on the direction of Citigroup i.e., Citigroup and Value Line go up and down completely randomly.
Pair Corralation between Citigroup and Value Line
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.87 times more return on investment than Value Line. However, Citigroup is 2.87 times more volatile than Value Line Asset. It trades about 0.1 of its potential returns per unit of risk. Value Line Asset is currently generating about 0.13 per unit of risk. If you would invest 4,357 in Citigroup on August 26, 2024 and sell it today you would earn a total of 2,627 from holding Citigroup or generate 60.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Value Line Asset
Performance |
| Timeline |
| Citigroup |
| Value Line Asset |
Citigroup and Value Line Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Value Line
The main advantage of trading using opposite Citigroup and Value Line positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Value Line 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 Value Line will offset losses from the drop in Value Line's long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
| Value Line vs. Value Line Asset | Value Line vs. Janus Balanced Fund | Value Line vs. Akre Focus Fund | Value Line vs. Global Opportunity Portfolio |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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