Correlation Between Citigroup and Nations VolDex
Can any of the company-specific risk be diversified away by investing in both Citigroup and Nations VolDex 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 Nations VolDex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Nations VolDex, you can compare the effects of market volatilities on Citigroup and Nations VolDex 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 Nations VolDex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Nations VolDex.
Diversification Opportunities for Citigroup and Nations VolDex
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Nations is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Nations VolDex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nations VolDex 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 Nations VolDex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nations VolDex has no effect on the direction of Citigroup i.e., Citigroup and Nations VolDex go up and down completely randomly.
Pair Corralation between Citigroup and Nations VolDex
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.31 times more return on investment than Nations VolDex. However, Citigroup is 3.2 times less risky than Nations VolDex. It trades about 0.26 of its potential returns per unit of risk. Nations VolDex is currently generating about -0.36 per unit of risk. If you would invest 6,361 in Citigroup on September 1, 2024 and sell it today you would earn a total of 726.00 from holding Citigroup or generate 11.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Citigroup vs. Nations VolDex
Performance |
| Timeline |
Citigroup and Nations VolDex Volatility Contrast
Predicted Return Density |
| Returns |
Citigroup
Pair trading matchups for Citigroup
Nations VolDex
Pair trading matchups for Nations VolDex
Pair Trading with Citigroup and Nations VolDex
The main advantage of trading using opposite Citigroup and Nations VolDex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Nations VolDex 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 Nations VolDex will offset losses from the drop in Nations VolDex's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Nations VolDex vs. HE Equipment Services | Nations VolDex vs. Eastern Co | Nations VolDex vs. Mannatech Incorporated | Nations VolDex vs. Timken Company |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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