Correlation Between Blackrock World and Citigroup
Can any of the company-specific risk be diversified away by investing in both Blackrock World 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 Blackrock World and Citigroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackrock World Mining and Citigroup, you can compare the effects of market volatilities on Blackrock World 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 Blackrock World with a short position of Citigroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock World and Citigroup.
Diversification Opportunities for Blackrock World and Citigroup
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Blackrock and Citigroup is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock World Mining and Citigroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citigroup and Blackrock World 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 Blackrock World Mining 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 Blackrock World i.e., Blackrock World and Citigroup go up and down completely randomly.
Pair Corralation between Blackrock World and Citigroup
Assuming the 90 days trading horizon Blackrock World Mining is expected to under-perform the Citigroup. But the stock apears to be less risky and, when comparing its historical volatility, Blackrock World Mining is 1.06 times less risky than Citigroup. The stock trades about -0.01 of its potential returns per unit of risk. The Citigroup is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 4,454 in Citigroup on September 12, 2024 and sell it today you would earn a total of 2,740 from holding Citigroup or generate 61.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.87% |
| Values | Daily Returns |
Blackrock World Mining vs. Citigroup
Performance |
| Timeline |
| Blackrock World Mining |
| Citigroup |
Blackrock World and Citigroup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackrock World and Citigroup
The main advantage of trading using opposite Blackrock World and Citigroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock World 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.| Blackrock World vs. Samsung Electronics Co | Blackrock World vs. Samsung Electronics Co | Blackrock World vs. Hyundai Motor | Blackrock World vs. Toyota Motor Corp |
| Citigroup vs. Smithson Investment Trust | Citigroup vs. Blackrock World Mining | Citigroup vs. CNH Industrial NV | Citigroup vs. Aberdeen Diversified Income |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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