Correlation Between Citigroup and Vy Umbia

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

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

Diversification Opportunities for Citigroup and Vy Umbia

0.66

Correlation Coefficient

Citigroup  Vy Umbia

Poor diversification

The 3 months correlation between Citigroup and ICVPX is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Vy Umbia Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vy Umbia Small 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 Vy Umbia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vy Umbia Small has no effect on the direction of Citigroup i.e., Citigroup and Vy Umbia go up and down completely randomly.

Pair Corralation between Citigroup and Vy Umbia

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.91 times more return on investment than Vy Umbia. However, Citigroup is 1.91 times more volatile than Vy Umbia Small. It trades about 0.05 of its potential returns per unit of risk. Vy Umbia Small is currently generating about -0.11 per unit of risk. If you would invest  6,871  in Citigroup on December 20, 2024 and sell it today you would earn a total of  311.00  from holding Citigroup or generate 4.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Citigroup  vs.  Vy Umbia Small

Citigroup

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 3 (%) 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 recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Vy Umbia Small

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vy Umbia Small has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Citigroup and Vy Umbia

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

The idea behind Citigroup and Vy Umbia Small 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.