Correlation Between Citigroup and IShares IShares
Can any of the company-specific risk be diversified away by investing in both Citigroup and IShares IShares 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 IShares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and iShares iShares, you can compare the effects of market volatilities on Citigroup and IShares IShares 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 IShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and IShares IShares.
Diversification Opportunities for Citigroup and IShares IShares
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and IShares is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and iShares iShares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares iShares 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 IShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares iShares has no effect on the direction of Citigroup i.e., Citigroup and IShares IShares go up and down completely randomly.
Pair Corralation between Citigroup and IShares IShares
Taking into account the 90-day investment horizon Citigroup is expected to generate 28.58 times more return on investment than IShares IShares. However, Citigroup is 28.58 times more volatile than iShares iShares. It trades about 0.25 of its potential returns per unit of risk. iShares iShares is currently generating about 0.22 per unit of risk. If you would invest 6,360 in Citigroup on August 28, 2024 and sell it today you would earn a total of 715.00 from holding Citigroup or generate 11.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Citigroup vs. iShares iShares
Performance |
| Timeline |
| Citigroup |
| iShares iShares |
Citigroup and IShares IShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and IShares IShares
The main advantage of trading using opposite Citigroup and IShares IShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, IShares IShares 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 IShares will offset losses from the drop in IShares IShares' long position.| Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
| IShares IShares vs. iShares Trust | IShares IShares vs. iShares Trust | IShares IShares vs. iShares Trust | IShares IShares vs. iShares Trust |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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