Correlation Between Citigroup and IShares Expanded
Can any of the company-specific risk be diversified away by investing in both Citigroup and IShares Expanded 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 Expanded into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and iShares Expanded Tech, you can compare the effects of market volatilities on Citigroup and IShares Expanded 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 Expanded. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and IShares Expanded.
Diversification Opportunities for Citigroup and IShares Expanded
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and IShares is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and iShares Expanded Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Expanded Tech 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 Expanded. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Expanded Tech has no effect on the direction of Citigroup i.e., Citigroup and IShares Expanded go up and down completely randomly.
Pair Corralation between Citigroup and IShares Expanded
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.29 times more return on investment than IShares Expanded. However, Citigroup is 1.29 times more volatile than iShares Expanded Tech. It trades about 0.09 of its potential returns per unit of risk. iShares Expanded Tech is currently generating about 0.08 per unit of risk. If you would invest 5,401 in Citigroup on August 27, 2024 and sell it today you would earn a total of 1,583 from holding Citigroup or generate 29.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. iShares Expanded Tech
Performance |
| Timeline |
| Citigroup |
| iShares Expanded Tech |
Citigroup and IShares Expanded Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and IShares Expanded
The main advantage of trading using opposite Citigroup and IShares Expanded positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, IShares Expanded 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 Expanded will offset losses from the drop in IShares Expanded's long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
| IShares Expanded vs. iShares Global Tech | IShares Expanded vs. iShares Technology ETF | IShares Expanded vs. iShares Consumer Discretionary | IShares Expanded vs. iShares Expanded Tech Software |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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