Correlation Between Citigroup and Viva Leisure
Can any of the company-specific risk be diversified away by investing in both Citigroup and Viva Leisure 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 Viva Leisure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Viva Leisure, you can compare the effects of market volatilities on Citigroup and Viva Leisure 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 Viva Leisure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Viva Leisure.
Diversification Opportunities for Citigroup and Viva Leisure
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Citigroup and Viva is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Viva Leisure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viva Leisure 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 Viva Leisure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viva Leisure has no effect on the direction of Citigroup i.e., Citigroup and Viva Leisure go up and down completely randomly.
Pair Corralation between Citigroup and Viva Leisure
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.79 times more return on investment than Viva Leisure. However, Citigroup is 1.26 times less risky than Viva Leisure. It trades about 0.23 of its potential returns per unit of risk. Viva Leisure is currently generating about -0.04 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 694.00 from holding Citigroup or generate 10.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Viva Leisure
Performance |
| Timeline |
| Citigroup |
| Viva Leisure |
Citigroup and Viva Leisure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Viva Leisure
The main advantage of trading using opposite Citigroup and Viva Leisure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Viva Leisure 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 Viva Leisure will offset losses from the drop in Viva Leisure's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Viva Leisure vs. ACDC Metals | Viva Leisure vs. Ragnar Metals | Viva Leisure vs. Aeon Metals | Viva Leisure vs. Leeuwin Metals |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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