Correlation Between Citigroup and IShares Healthcare
Can any of the company-specific risk be diversified away by investing in both Citigroup and IShares Healthcare 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 Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and iShares Healthcare Providers, you can compare the effects of market volatilities on Citigroup and IShares Healthcare 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 Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and IShares Healthcare.
Diversification Opportunities for Citigroup and IShares Healthcare
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and IShares is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and iShares Healthcare Providers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Healthcare 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 Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Healthcare has no effect on the direction of Citigroup i.e., Citigroup and IShares Healthcare go up and down completely randomly.
Pair Corralation between Citigroup and IShares Healthcare
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.7 times more return on investment than IShares Healthcare. However, Citigroup is 1.7 times more volatile than iShares Healthcare Providers. It trades about 0.26 of its potential returns per unit of risk. iShares Healthcare Providers is currently generating about 0.18 per unit of risk. If you would invest 6,361 in Citigroup on September 1, 2024 and sell it today you would earn a total of 726.00 from holding Citigroup or generate 11.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. iShares Healthcare Providers
Performance |
| Timeline |
| Citigroup |
| iShares Healthcare |
Citigroup and IShares Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and IShares Healthcare
The main advantage of trading using opposite Citigroup and IShares Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, IShares Healthcare 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 Healthcare will offset losses from the drop in IShares Healthcare's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| IShares Healthcare vs. iShares Pharmaceuticals ETF | IShares Healthcare vs. iShares Medical Devices | IShares Healthcare vs. iShares Healthcare ETF | IShares Healthcare vs. iShares Broker Dealers Securities |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |