Correlation Between Citigroup and BlackRock Future
Can any of the company-specific risk be diversified away by investing in both Citigroup and BlackRock Future 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 Future into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and BlackRock Future Health, you can compare the effects of market volatilities on Citigroup and BlackRock Future 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 Future. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and BlackRock Future.
Diversification Opportunities for Citigroup and BlackRock Future
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Citigroup and BlackRock is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and BlackRock Future Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock Future Health 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 Future. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock Future Health has no effect on the direction of Citigroup i.e., Citigroup and BlackRock Future go up and down completely randomly.
Pair Corralation between Citigroup and BlackRock Future
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.76 times more return on investment than BlackRock Future. However, Citigroup is 2.76 times more volatile than BlackRock Future Health. It trades about 0.41 of its potential returns per unit of risk. BlackRock Future Health is currently generating about 0.17 per unit of risk. If you would invest 6,977 in Citigroup on October 24, 2024 and sell it today you would earn a total of 1,022 from holding Citigroup or generate 14.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. BlackRock Future Health
Performance |
| Timeline |
| Citigroup |
| BlackRock Future Health |
Citigroup and BlackRock Future Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and BlackRock Future
The main advantage of trading using opposite Citigroup and BlackRock Future positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, BlackRock Future 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 Future will offset losses from the drop in BlackRock Future's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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