Correlation Between Citigroup and Vision Sensing

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

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

Diversification Opportunities for Citigroup and Vision Sensing

-0.11

Correlation Coefficient

Citigroup  Vision Sensing

Good diversification

The 3 months correlation between Citigroup and Vision is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Vision Sensing Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vision Sensing Acqui 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 Vision Sensing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vision Sensing Acqui has no effect on the direction of Citigroup i.e., Citigroup and Vision Sensing go up and down completely randomly.

Pair Corralation between Citigroup and Vision Sensing

Taking into account the 90-day investment horizon Citigroup is expected to generate 6.59 times more return on investment than Vision Sensing. However, Citigroup is 6.59 times more volatile than Vision Sensing Acquisition. It trades about 0.09 of its potential returns per unit of risk. Vision Sensing Acquisition is currently generating about 0.11 per unit of risk. If you would invest  5,248  in Citigroup on October 7, 2024 and sell it today you would earn a total of  1,852  from holding Citigroup or generate 35.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	81.5%
Values	Daily Returns

Citigroup  vs.  Vision Sensing Acquisition

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 unsteady fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

Vision Sensing Acqui

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days Vision Sensing Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Vision Sensing is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Citigroup and Vision Sensing

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

The idea behind Citigroup and Vision Sensing Acquisition 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.