Correlation Between Citigroup and Vivaldi Merger

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

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

Diversification Opportunities for Citigroup and Vivaldi Merger

0.86

Correlation Coefficient

Citigroup  Vivaldi Merger

Very poor diversification

The 3 months correlation between Citigroup and Vivaldi is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Vivaldi Merger Arbitrage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vivaldi Merger Arbitrage 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 Vivaldi Merger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vivaldi Merger Arbitrage has no effect on the direction of Citigroup i.e., Citigroup and Vivaldi Merger go up and down completely randomly.

Pair Corralation between Citigroup and Vivaldi Merger

Taking into account the 90-day investment horizon Citigroup is expected to generate 13.89 times more return on investment than Vivaldi Merger. However, Citigroup is 13.89 times more volatile than Vivaldi Merger Arbitrage. It trades about 0.39 of its potential returns per unit of risk. Vivaldi Merger Arbitrage is currently generating about 0.27 per unit of risk. If you would invest  6,789  in Citigroup on April 25, 2025 and sell it today you would earn a total of  2,810  from holding Citigroup or generate 41.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.39%
Values	Daily Returns

Citigroup  vs.  Vivaldi Merger Arbitrage

Citigroup

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 30 (%) 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.

Vivaldi Merger Arbitrage

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Vivaldi Merger Arbitrage are ranked lower than 21 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental drivers, Vivaldi Merger 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 Vivaldi Merger

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

The idea behind Citigroup and Vivaldi Merger Arbitrage 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.