Correlation Between Citigroup and Vodafone Group
Can any of the company-specific risk be diversified away by investing in both Citigroup and Vodafone Group 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 Vodafone Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Vodafone Group Plc, you can compare the effects of market volatilities on Citigroup and Vodafone Group 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 Vodafone Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Vodafone Group.
Diversification Opportunities for Citigroup and Vodafone Group
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Vodafone is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Vodafone Group Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vodafone Group Plc 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 Vodafone Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vodafone Group Plc has no effect on the direction of Citigroup i.e., Citigroup and Vodafone Group go up and down completely randomly.
Pair Corralation between Citigroup and Vodafone Group
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.03 times more return on investment than Vodafone Group. However, Citigroup is 1.03 times more volatile than Vodafone Group Plc. It trades about 0.21 of its potential returns per unit of risk. Vodafone Group Plc is currently generating about -0.01 per unit of risk. If you would invest 6,393 in Citigroup on August 31, 2024 and sell it today you would earn a total of 623.00 from holding Citigroup or generate 9.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Citigroup vs. Vodafone Group Plc
Performance |
| Timeline |
| Citigroup |
| Vodafone Group Plc |
Citigroup and Vodafone Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Vodafone Group
The main advantage of trading using opposite Citigroup and Vodafone Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Vodafone Group 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 Vodafone Group will offset losses from the drop in Vodafone Group's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Vodafone Group vs. Deutsche Bank Aktiengesellschaft | Vodafone Group vs. First Republic Bank | Vodafone Group vs. Monster Beverage Corp | Vodafone Group vs. Grupo Sports World |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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