Correlation Between Citigroup and IShares Nasdaq
Can any of the company-specific risk be diversified away by investing in both Citigroup and IShares Nasdaq 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 IShares Nasdaq into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and iShares Nasdaq Biotechnology, you can compare the effects of market volatilities on Citigroup and IShares Nasdaq 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 IShares Nasdaq. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and IShares Nasdaq.
Diversification Opportunities for Citigroup and IShares Nasdaq
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and IShares is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and iShares Nasdaq Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Nasdaq Biote 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 IShares Nasdaq. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Nasdaq Biote has no effect on the direction of Citigroup i.e., Citigroup and IShares Nasdaq go up and down completely randomly.
Pair Corralation between Citigroup and IShares Nasdaq
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.18 times more return on investment than IShares Nasdaq. However, Citigroup is 1.18 times more volatile than iShares Nasdaq Biotechnology. It trades about 0.21 of its potential returns per unit of risk. iShares Nasdaq Biotechnology is currently generating about -0.03 per unit of risk. If you would invest 6,393 in Citigroup on August 31, 2024 and sell it today you would earn a total of 623.00 from holding Citigroup or generate 9.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. iShares Nasdaq Biotechnology
Performance |
| Timeline |
| Citigroup |
| iShares Nasdaq Biote |
Citigroup and IShares Nasdaq Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and IShares Nasdaq
The main advantage of trading using opposite Citigroup and IShares Nasdaq positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, IShares Nasdaq 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 IShares Nasdaq will offset losses from the drop in IShares Nasdaq's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| IShares Nasdaq vs. Vanguard FTSE Developed | IShares Nasdaq vs. Leverage Shares 2x | IShares Nasdaq vs. Amundi Index Solutions | IShares Nasdaq vs. Amundi Index Solutions |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |