Correlation Between Citigroup and Veeva Systems

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

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

Diversification Opportunities for Citigroup and Veeva Systems

0.72

Correlation Coefficient

Citigroup  Veeva Systems

Poor diversification

The 3 months correlation between Citigroup and Veeva is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Veeva Systems Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Veeva Systems Class 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 Veeva Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Veeva Systems Class has no effect on the direction of Citigroup i.e., Citigroup and Veeva Systems go up and down completely randomly.

Pair Corralation between Citigroup and Veeva Systems

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.56 times more return on investment than Veeva Systems. However, Citigroup is 1.79 times less risky than Veeva Systems. It trades about 0.29 of its potential returns per unit of risk. Veeva Systems Class is currently generating about 0.11 per unit of risk. If you would invest  7,024  in Citigroup on May 5, 2025 and sell it today you would earn a total of  2,159  from holding Citigroup or generate 30.74% return on investment over 90 days.

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

Citigroup  vs.  Veeva Systems Class

Citigroup

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

Veeva Systems Class

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Veeva Systems Class are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, Veeva Systems showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and Veeva Systems

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

The idea behind Citigroup and Veeva Systems Class 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.