Correlation Between Citigroup and VivoPower International
Can any of the company-specific risk be diversified away by investing in both Citigroup and VivoPower International 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 VivoPower International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and VivoPower International PLC, you can compare the effects of market volatilities on Citigroup and VivoPower International 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 VivoPower International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and VivoPower International.
Diversification Opportunities for Citigroup and VivoPower International
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and VivoPower is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and VivoPower International PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VivoPower International 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 VivoPower International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VivoPower International has no effect on the direction of Citigroup i.e., Citigroup and VivoPower International go up and down completely randomly.
Pair Corralation between Citigroup and VivoPower International
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.53 times less return on investment than VivoPower International. But when comparing it to its historical volatility, Citigroup is 6.96 times less risky than VivoPower International. It trades about 0.17 of its potential returns per unit of risk. VivoPower International PLC is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 106.00 in VivoPower International PLC on August 28, 2024 and sell it today you would earn a total of 1.00 from holding VivoPower International PLC or generate 0.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. VivoPower International PLC
Performance |
| Timeline |
| Citigroup |
| VivoPower International |
Citigroup and VivoPower International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and VivoPower International
The main advantage of trading using opposite Citigroup and VivoPower International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, VivoPower International 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 VivoPower International will offset losses from the drop in VivoPower International's long position.| Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
| VivoPower International vs. Emeren Group | VivoPower International vs. Tigo Energy | VivoPower International vs. Sunrun Inc | VivoPower International vs. Sunnova Energy International |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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