Correlation Between Citigroup and Valkyrie Bitcoin

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

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

Diversification Opportunities for Citigroup and Valkyrie Bitcoin

0.57

Correlation Coefficient

Citigroup  Valkyrie Bitcoin

Very weak diversification

The 3 months correlation between Citigroup and Valkyrie is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Valkyrie Bitcoin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valkyrie Bitcoin 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 Valkyrie Bitcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valkyrie Bitcoin has no effect on the direction of Citigroup i.e., Citigroup and Valkyrie Bitcoin go up and down completely randomly.

Pair Corralation between Citigroup and Valkyrie Bitcoin

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.68 times more return on investment than Valkyrie Bitcoin. However, Citigroup is 1.46 times less risky than Valkyrie Bitcoin. It trades about 0.01 of its potential returns per unit of risk. Valkyrie Bitcoin is currently generating about -0.05 per unit of risk. If you would invest  6,991  in Citigroup on December 29, 2024 and sell it today you would earn a total of  42.00  from holding Citigroup or generate 0.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

Citigroup  vs.  Valkyrie Bitcoin

Citigroup

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Citigroup is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Valkyrie Bitcoin

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Citigroup and Valkyrie Bitcoin

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

The idea behind Citigroup and Valkyrie Bitcoin 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.