Correlation Between Citigroup and Vest Bitcoin

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

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

Diversification Opportunities for Citigroup and Vest Bitcoin

0.53

Correlation Coefficient

Citigroup  Vest Bitcoin

Very weak diversification

The 3 months correlation between Citigroup and Vest is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Vest Bitcoin Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vest Bitcoin Strategy 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 Vest Bitcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vest Bitcoin Strategy has no effect on the direction of Citigroup i.e., Citigroup and Vest Bitcoin go up and down completely randomly.

Pair Corralation between Citigroup and Vest Bitcoin

Taking into account the 90-day investment horizon Citigroup is expected to generate 2.38 times less return on investment than Vest Bitcoin. But when comparing it to its historical volatility, Citigroup is 2.02 times less risky than Vest Bitcoin. It trades about 0.06 of its potential returns per unit of risk. Vest Bitcoin Strategy is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  2,246  in Vest Bitcoin Strategy on October 15, 2024 and sell it today you would earn a total of  748.00  from holding Vest Bitcoin Strategy or generate 33.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	31.31%
Values	Daily Returns

Citigroup  vs.  Vest Bitcoin Strategy

Citigroup

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 12 (%) 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.

Vest Bitcoin Strategy

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vest Bitcoin Strategy are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Vest Bitcoin showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and Vest Bitcoin

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

The idea behind Citigroup and Vest Bitcoin Strategy 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.

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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.