Correlation Between Citigroup and Virtus ETF
Can any of the company-specific risk be diversified away by investing in both Citigroup and Virtus ETF 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 Virtus ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Virtus ETF Trust, you can compare the effects of market volatilities on Citigroup and Virtus ETF 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 Virtus ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Virtus ETF.
Diversification Opportunities for Citigroup and Virtus ETF
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Virtus is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Virtus ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus ETF Trust 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 Virtus ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus ETF Trust has no effect on the direction of Citigroup i.e., Citigroup and Virtus ETF go up and down completely randomly.
Pair Corralation between Citigroup and Virtus ETF
Taking into account the 90-day investment horizon Citigroup is expected to generate 6.99 times more return on investment than Virtus ETF. However, Citigroup is 6.99 times more volatile than Virtus ETF Trust. It trades about 0.12 of its potential returns per unit of risk. Virtus ETF Trust is currently generating about 0.18 per unit of risk. If you would invest 4,445 in Citigroup on August 26, 2024 and sell it today you would earn a total of 2,539 from holding Citigroup or generate 57.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Virtus ETF Trust
Performance |
| Timeline |
| Citigroup |
| Virtus ETF Trust |
Citigroup and Virtus ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Virtus ETF
The main advantage of trading using opposite Citigroup and Virtus ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Virtus ETF 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 Virtus ETF will offset losses from the drop in Virtus ETF's long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
| Virtus ETF vs. BondBloxx ETF Trust | Virtus ETF vs. Virtus ETF Trust | Virtus ETF vs. Ocean Park High | Virtus ETF vs. iShares JP Morgan |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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