Correlation Between Citigroup and VALORA HLDG

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

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

Diversification Opportunities for Citigroup and VALORA HLDG

0.0

Correlation Coefficient

Citigroup  VALORA HLDG

Pay attention - limited upside

The 3 months correlation between Citigroup and VALORA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and VALORA HLDG OPEN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VALORA HLDG OPEN 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 VALORA HLDG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VALORA HLDG OPEN has no effect on the direction of Citigroup i.e., Citigroup and VALORA HLDG go up and down completely randomly.

Pair Corralation between Citigroup and VALORA HLDG

If you would invest  7,016  in Citigroup on September 28, 2024 and sell it today you would earn a total of  84.00  from holding Citigroup or generate 1.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Citigroup  vs.  VALORA HLDG OPEN

Citigroup

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 9 (%) 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.

VALORA HLDG OPEN

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VALORA HLDG OPEN has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, VALORA HLDG is not utilizing all of its potentials. The new stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Citigroup and VALORA HLDG

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

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