Correlation Between Citigroup and Vanguard Managed

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

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

Diversification Opportunities for Citigroup and Vanguard Managed

-0.24

Correlation Coefficient

Citigroup  Vanguard Managed

Very good diversification

The 3 months correlation between Citigroup and VANGUARD is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Vanguard Managed Payout in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Managed Payout 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 Vanguard Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Managed Payout has no effect on the direction of Citigroup i.e., Citigroup and Vanguard Managed go up and down completely randomly.

Pair Corralation between Citigroup and Vanguard Managed

If you would invest  6,042  in Citigroup on September 4, 2024 and sell it today you would earn a total of  1,097  from holding Citigroup or generate 18.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Citigroup  vs.  Vanguard Managed Payout

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.

Vanguard Managed Payout

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vanguard Managed Payout has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Vanguard Managed 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 Vanguard Managed

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

The idea behind Citigroup and Vanguard Managed Payout 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.