Correlation Between Citigroup and BlackRock Core
Can any of the company-specific risk be diversified away by investing in both Citigroup and BlackRock Core 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 Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and BlackRock Core Bond, you can compare the effects of market volatilities on Citigroup and BlackRock Core 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 Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and BlackRock Core.
Diversification Opportunities for Citigroup and BlackRock Core
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and BlackRock is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and BlackRock Core Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock Core Bond 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 Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock Core Bond has no effect on the direction of Citigroup i.e., Citigroup and BlackRock Core go up and down completely randomly.
Pair Corralation between Citigroup and BlackRock Core
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.54 times more return on investment than BlackRock Core. However, Citigroup is 1.54 times more volatile than BlackRock Core Bond. It trades about 0.07 of its potential returns per unit of risk. BlackRock Core Bond is currently generating about 0.04 per unit of risk. If you would invest 4,117 in Citigroup on August 28, 2024 and sell it today you would earn a total of 2,958 from holding Citigroup or generate 71.85% 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 Core Bond
Performance |
| Timeline |
| Citigroup |
| BlackRock Core Bond |
Citigroup and BlackRock Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and BlackRock Core
The main advantage of trading using opposite Citigroup and BlackRock Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, BlackRock Core 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 Core will offset losses from the drop in BlackRock Core's long position.| Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
| BlackRock Core vs. MFS High Income | BlackRock Core vs. MFS Investment Grade | BlackRock Core vs. Eaton Vance National | BlackRock Core vs. Invesco High 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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