Correlation Between Citigroup and Victory Rs

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

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

Diversification Opportunities for Citigroup and Victory Rs

0.8

Correlation Coefficient

Citigroup  Victory Rs

Very poor diversification

The 3 months correlation between Citigroup and Victory is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Victory Rs Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory Rs Global 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 Victory Rs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory Rs Global has no effect on the direction of Citigroup i.e., Citigroup and Victory Rs go up and down completely randomly.

Pair Corralation between Citigroup and Victory Rs

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.99 times more return on investment than Victory Rs. However, Citigroup is 1.99 times more volatile than Victory Rs Global. It trades about 0.19 of its potential returns per unit of risk. Victory Rs Global is currently generating about 0.33 per unit of risk. If you would invest  6,900  in Citigroup on September 17, 2024 and sell it today you would earn a total of  201.00  from holding Citigroup or generate 2.91% return on investment over 90 days.

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

Citigroup  vs.  Victory Rs Global

Citigroup

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 13 (%) 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.

Victory Rs Global

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Victory Rs Global are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Victory Rs 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 Victory Rs

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

The idea behind Citigroup and Victory Rs Global 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.