Correlation Between Citigroup and Voya Floating

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

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

Diversification Opportunities for Citigroup and Voya Floating

0.84

Correlation Coefficient

Citigroup  Voya Floating

Very poor diversification

The 3 months correlation between Citigroup and Voya is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Voya Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Floating Rate 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 Voya Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Floating Rate has no effect on the direction of Citigroup i.e., Citigroup and Voya Floating go up and down completely randomly.

Pair Corralation between Citigroup and Voya Floating

Taking into account the 90-day investment horizon Citigroup is expected to generate 14.14 times more return on investment than Voya Floating. However, Citigroup is 14.14 times more volatile than Voya Floating Rate. It trades about 0.42 of its potential returns per unit of risk. Voya Floating Rate is currently generating about 0.21 per unit of risk. If you would invest  7,100  in Citigroup on October 25, 2024 and sell it today you would earn a total of  1,098  from holding Citigroup or generate 15.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	94.74%
Values	Daily Returns

Citigroup  vs.  Voya Floating Rate

Citigroup

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

Voya Floating Rate

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Voya Floating Rate are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Voya Floating is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Citigroup and Voya Floating

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

The idea behind Citigroup and Voya Floating Rate 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.