Correlation Between Citigroup and Viad Corp

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

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

Diversification Opportunities for Citigroup and Viad Corp

0.91

Correlation Coefficient

Citigroup  Viad Corp

Almost no diversification

The 3 months correlation between Citigroup and Viad is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Viad Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viad Corp 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 Viad Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viad Corp has no effect on the direction of Citigroup i.e., Citigroup and Viad Corp go up and down completely randomly.

Pair Corralation between Citigroup and Viad Corp

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.12 times less return on investment than Viad Corp. But when comparing it to its historical volatility, Citigroup is 1.52 times less risky than Viad Corp. It trades about 0.33 of its potential returns per unit of risk. Viad Corp is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  3,856  in Viad Corp on September 5, 2024 and sell it today you would earn a total of  640.00  from holding Viad Corp or generate 16.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	95.45%
Values	Daily Returns

Citigroup  vs.  Viad Corp

Citigroup

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 11 (%) 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.

Viad Corp

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Viad Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, Viad Corp demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and Viad Corp

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

The idea behind Citigroup and Viad Corp 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.