Correlation Between Citigroup and Voya Large
Can any of the company-specific risk be diversified away by investing in both Citigroup and Voya Large 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 Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Voya Large Cap, you can compare the effects of market volatilities on Citigroup and Voya Large 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 Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Voya Large.
Diversification Opportunities for Citigroup and Voya Large
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Voya is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Voya Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Large Cap 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 Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Large Cap has no effect on the direction of Citigroup i.e., Citigroup and Voya Large go up and down completely randomly.
Pair Corralation between Citigroup and Voya Large
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.89 times more return on investment than Voya Large. However, Citigroup is 1.89 times more volatile than Voya Large Cap. It trades about 0.02 of its potential returns per unit of risk. Voya Large Cap is currently generating about -0.41 per unit of risk. If you would invest 7,075 in Citigroup on September 25, 2024 and sell it today you would earn a total of 25.00 from holding Citigroup or generate 0.35% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Citigroup vs. Voya Large Cap
Performance |
Timeline |
Citigroup |
Voya Large Cap |
Citigroup and Voya Large Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Citigroup and Voya Large
The main advantage of trading using opposite Citigroup and Voya Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Voya Large 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 Large will offset losses from the drop in Voya Large's long position.The idea behind Citigroup and Voya Large Cap 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.Voya Large vs. Voya Bond Index | Voya Large vs. Voya Bond Index | Voya Large vs. Voya Limited Maturity | Voya Large vs. Voya Limited Maturity |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
Analyst Advice Analyst recommendations and target price estimates broken down by several categories |