Correlation Between Citigroup and Vanguard Reit
Can any of the company-specific risk be diversified away by investing in both Citigroup and Vanguard Reit 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 Reit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Vanguard Reit Ii, you can compare the effects of market volatilities on Citigroup and Vanguard Reit 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 Reit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Vanguard Reit.
Diversification Opportunities for Citigroup and Vanguard Reit
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Vanguard is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Vanguard Reit Ii in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Reit Ii 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 Reit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Reit Ii has no effect on the direction of Citigroup i.e., Citigroup and Vanguard Reit go up and down completely randomly.
Pair Corralation between Citigroup and Vanguard Reit
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.02 times more return on investment than Vanguard Reit. However, Citigroup is 2.02 times more volatile than Vanguard Reit Ii. It trades about 0.23 of its potential returns per unit of risk. Vanguard Reit Ii is currently generating about 0.01 per unit of risk. If you would invest 6,360 in Citigroup on August 27, 2024 and sell it today you would earn a total of 624.00 from holding Citigroup or generate 9.81% 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 Reit Ii
Performance |
| Timeline |
| Citigroup |
| Vanguard Reit Ii |
Citigroup and Vanguard Reit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Vanguard Reit
The main advantage of trading using opposite Citigroup and Vanguard Reit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Vanguard Reit 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 Reit will offset losses from the drop in Vanguard Reit's long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
| Vanguard Reit vs. Vanguard Emerging Markets | Vanguard Reit vs. Vanguard Small Cap Index | Vanguard Reit vs. Vanguard Total International | Vanguard Reit vs. Vanguard Total Bond |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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