Correlation Between Citigroup and BlackRock Municipal
Can any of the company-specific risk be diversified away by investing in both Citigroup and BlackRock Municipal 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 BlackRock Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and BlackRock Municipal Income, you can compare the effects of market volatilities on Citigroup and BlackRock Municipal 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 BlackRock Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and BlackRock Municipal.
Diversification Opportunities for Citigroup and BlackRock Municipal
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and BlackRock is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and BlackRock Municipal Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock Municipal 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 BlackRock Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock Municipal has no effect on the direction of Citigroup i.e., Citigroup and BlackRock Municipal go up and down completely randomly.
Pair Corralation between Citigroup and BlackRock Municipal
Taking into account the 90-day investment horizon Citigroup is expected to generate 3.22 times more return on investment than BlackRock Municipal. However, Citigroup is 3.22 times more volatile than BlackRock Municipal Income. It trades about 0.08 of its potential returns per unit of risk. BlackRock Municipal Income is currently generating about 0.06 per unit of risk. If you would invest 5,415 in Citigroup on August 28, 2024 and sell it today you would earn a total of 1,660 from holding Citigroup or generate 30.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. BlackRock Municipal Income
Performance |
| Timeline |
| Citigroup |
| BlackRock Municipal |
Citigroup and BlackRock Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and BlackRock Municipal
The main advantage of trading using opposite Citigroup and BlackRock Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, BlackRock Municipal 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 BlackRock Municipal will offset losses from the drop in BlackRock Municipal's long position.| Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |