Correlation Between Citigroup and VOGO SA

Can any of the company-specific risk be diversified away by investing in both Citigroup and VOGO SA 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 VOGO SA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Citigroup and VOGO SA, you can compare the effects of market volatilities on Citigroup and VOGO SA 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 VOGO SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and VOGO SA.

Diversification Opportunities for Citigroup and VOGO SA

-0.02

Correlation Coefficient

Citigroup  VOGO SA

Good diversification

The 3 months correlation between Citigroup and VOGO is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and VOGO SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VOGO SA 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 VOGO SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VOGO SA has no effect on the direction of Citigroup i.e., Citigroup and VOGO SA go up and down completely randomly.

Pair Corralation between Citigroup and VOGO SA

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.8 times more return on investment than VOGO SA. However, Citigroup is 1.25 times less risky than VOGO SA. It trades about 0.06 of its potential returns per unit of risk. VOGO SA is currently generating about -0.03 per unit of risk. If you would invest  6,350  in Citigroup on September 30, 2024 and sell it today you would earn a total of  750.00  from holding Citigroup or generate 11.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Citigroup  vs.  VOGO SA

Citigroup

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

VOGO SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VOGO SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Citigroup and VOGO SA

The main advantage of trading using opposite Citigroup and VOGO SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, VOGO SA 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 VOGO SA will offset losses from the drop in VOGO SA's long position.

The idea behind Citigroup and VOGO SA 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.

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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.