Correlation Between Citigroup and Voya Vacs

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

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

Diversification Opportunities for Citigroup and Voya Vacs

0.19

Correlation Coefficient

Citigroup  Voya Vacs

Average diversification

The 3 months correlation between Citigroup and Voya is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Voya Vacs Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Vacs Series 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 Vacs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Vacs Series has no effect on the direction of Citigroup i.e., Citigroup and Voya Vacs go up and down completely randomly.

Pair Corralation between Citigroup and Voya Vacs

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.07 times less return on investment than Voya Vacs. In addition to that, Citigroup is 2.0 times more volatile than Voya Vacs Series. It trades about 0.04 of its total potential returns per unit of risk. Voya Vacs Series is currently generating about 0.09 per unit of volatility. If you would invest  1,046  in Voya Vacs Series on December 20, 2024 and sell it today you would earn a total of  55.00  from holding Voya Vacs Series or generate 5.26% return on investment over 90 days.

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

Citigroup  vs.  Voya Vacs Series

Citigroup

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Citigroup is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Voya Vacs Series

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Voya Vacs Series are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Voya Vacs 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 Voya Vacs

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

The idea behind Citigroup and Voya Vacs Series 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.