Correlation Between Citigroup and IShares Intl
Can any of the company-specific risk be diversified away by investing in both Citigroup and IShares Intl 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 Intl into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and iShares Intl High, you can compare the effects of market volatilities on Citigroup and IShares Intl 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 Intl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and IShares Intl.
Diversification Opportunities for Citigroup and IShares Intl
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Citigroup and IShares is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and iShares Intl High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Intl High 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 Intl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Intl High has no effect on the direction of Citigroup i.e., Citigroup and IShares Intl go up and down completely randomly.
Pair Corralation between Citigroup and IShares Intl
Taking into account the 90-day investment horizon Citigroup is expected to generate 4.62 times more return on investment than IShares Intl. However, Citigroup is 4.62 times more volatile than iShares Intl High. It trades about 0.12 of its potential returns per unit of risk. iShares Intl High is currently generating about 0.13 per unit of risk. If you would invest 3,936 in Citigroup on August 29, 2024 and sell it today you would earn a total of 3,080 from holding Citigroup or generate 78.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. iShares Intl High
Performance |
| Timeline |
| Citigroup |
| iShares Intl High |
Citigroup and IShares Intl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and IShares Intl
The main advantage of trading using opposite Citigroup and IShares Intl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, IShares Intl 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 Intl will offset losses from the drop in IShares Intl's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| IShares Intl vs. iShares International High | IShares Intl vs. iShares JP Morgan | IShares Intl vs. iShares JP Morgan | IShares Intl vs. VanEck International High |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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