Correlation Between Citigroup and Vanguard Long
Can any of the company-specific risk be diversified away by investing in both Citigroup and Vanguard Long 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 Long into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Vanguard Long Term Investment Grade, you can compare the effects of market volatilities on Citigroup and Vanguard Long 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 Long. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Vanguard Long.
Diversification Opportunities for Citigroup and Vanguard Long
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and Vanguard is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Vanguard Long Term Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Long Term 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 Long. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Long Term has no effect on the direction of Citigroup i.e., Citigroup and Vanguard Long go up and down completely randomly.
Pair Corralation between Citigroup and Vanguard Long
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.96 times more return on investment than Vanguard Long. However, Citigroup is 2.96 times more volatile than Vanguard Long Term Investment Grade. It trades about 0.15 of its potential returns per unit of risk. Vanguard Long Term Investment Grade is currently generating about -0.13 per unit of risk. If you would invest 6,133 in Citigroup on August 28, 2024 and sell it today you would earn a total of 842.00 from holding Citigroup or generate 13.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Vanguard Long Term Investment
Performance |
| Timeline |
| Citigroup |
| Vanguard Long Term |
Citigroup and Vanguard Long Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Vanguard Long
The main advantage of trading using opposite Citigroup and Vanguard Long positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Vanguard Long 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 Long will offset losses from the drop in Vanguard Long's long position.The idea behind Citigroup and Vanguard Long Term Investment Grade pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Vanguard Long vs. Virtus High Yield | Vanguard Long vs. Pimco High Yield | Vanguard Long vs. Pioneer High Yield | Vanguard Long vs. American Century High |
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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