Correlation Between Vanguard Intermediate and Citigroup
Can any of the company-specific risk be diversified away by investing in both Vanguard Intermediate and Citigroup 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 Vanguard Intermediate and Citigroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Intermediate Term Tax Exempt and Citigroup, you can compare the effects of market volatilities on Vanguard Intermediate and Citigroup 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 Vanguard Intermediate with a short position of Citigroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Intermediate and Citigroup.
Diversification Opportunities for Vanguard Intermediate and Citigroup
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Vanguard and Citigroup is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Intermediate Term Tax and Citigroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citigroup and Vanguard Intermediate 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 Vanguard Intermediate Term Tax Exempt are associated (or correlated) with Citigroup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citigroup has no effect on the direction of Vanguard Intermediate i.e., Vanguard Intermediate and Citigroup go up and down completely randomly.
Pair Corralation between Vanguard Intermediate and Citigroup
Assuming the 90 days horizon Vanguard Intermediate Term Tax Exempt is expected to under-perform the Citigroup. But the mutual fund apears to be less risky and, when comparing its historical volatility, Vanguard Intermediate Term Tax Exempt is 11.87 times less risky than Citigroup. The mutual fund trades about -0.28 of its potential returns per unit of risk. The Citigroup is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 6,166 in Citigroup on January 26, 2024 and sell it today you would earn a total of 81.00 from holding Citigroup or generate 1.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Intermediate Term Tax vs. Citigroup
Performance |
| Timeline |
| Vanguard Intermediate |
| Citigroup |
Vanguard Intermediate and Citigroup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Intermediate and Citigroup
The main advantage of trading using opposite Vanguard Intermediate and Citigroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Intermediate position performs unexpectedly, Citigroup 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 Citigroup will offset losses from the drop in Citigroup's long position.| Vanguard Intermediate vs. Vanguard Intermediate Term Tax Exempt | Vanguard Intermediate vs. Tax Exempt Bond | Vanguard Intermediate vs. Tax Exempt Bond | Vanguard Intermediate vs. Tax Exempt Bond |
| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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