Correlation Between Citigroup and Victory Energy
Can any of the company-specific risk be diversified away by investing in both Citigroup and Victory Energy 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 Victory Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Victory Energy Corp, you can compare the effects of market volatilities on Citigroup and Victory Energy 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 Victory Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Victory Energy.
Diversification Opportunities for Citigroup and Victory Energy
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and Victory is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Victory Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory Energy Corp 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 Victory Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory Energy Corp has no effect on the direction of Citigroup i.e., Citigroup and Victory Energy go up and down completely randomly.
Pair Corralation between Citigroup and Victory Energy
Taking into account the 90-day investment horizon Citigroup is expected to generate 119.58 times less return on investment than Victory Energy. But when comparing it to its historical volatility, Citigroup is 115.39 times less risky than Victory Energy. It trades about 0.26 of its potential returns per unit of risk. Victory Energy Corp is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 11.00 in Victory Energy Corp on September 1, 2024 and sell it today you would earn a total of 19.00 from holding Victory Energy Corp or generate 172.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Victory Energy Corp
Performance |
| Timeline |
| Citigroup |
| Victory Energy Corp |
Citigroup and Victory Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Victory Energy
The main advantage of trading using opposite Citigroup and Victory Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Victory Energy 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 Victory Energy will offset losses from the drop in Victory Energy's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Victory Energy vs. Halliburton | Victory Energy vs. Petrofac Ltd ADR | Victory Energy vs. Akastor ASA | Victory Energy vs. Calfrac Well Services |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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