Correlation Between Citigroup and Vanguard Small-cap
Can any of the company-specific risk be diversified away by investing in both Citigroup and Vanguard Small-cap 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 Small-cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Vanguard Small Cap Index, you can compare the effects of market volatilities on Citigroup and Vanguard Small-cap 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 Small-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Vanguard Small-cap.
Diversification Opportunities for Citigroup and Vanguard Small-cap
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Citigroup and Vanguard is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Vanguard Small Cap Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Small Cap 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 Small-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Small Cap has no effect on the direction of Citigroup i.e., Citigroup and Vanguard Small-cap go up and down completely randomly.
Pair Corralation between Citigroup and Vanguard Small-cap
Taking into account the 90-day investment horizon Citigroup is expected to under-perform the Vanguard Small-cap. In addition to that, Citigroup is 1.4 times more volatile than Vanguard Small Cap Index. It trades about -0.09 of its total potential returns per unit of risk. Vanguard Small Cap Index is currently generating about -0.12 per unit of volatility. If you would invest 11,738 in Vanguard Small Cap Index on January 15, 2025 and sell it today you would lose (1,780) from holding Vanguard Small Cap Index or give up 15.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Vanguard Small Cap Index
Performance |
| Timeline |
| Citigroup |
| Vanguard Small Cap |
Citigroup and Vanguard Small-cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Vanguard Small-cap
The main advantage of trading using opposite Citigroup and Vanguard Small-cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Vanguard Small-cap 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 Small-cap will offset losses from the drop in Vanguard Small-cap's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Vanguard Small-cap vs. Vanguard Mid Cap Index | Vanguard Small-cap vs. Vanguard 500 Index | Vanguard Small-cap vs. Vanguard Emerging Markets | Vanguard Small-cap vs. Vanguard Reit Index |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |