Correlation Between Citigroup and IShares European
Can any of the company-specific risk be diversified away by investing in both Citigroup and IShares European 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 European into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and iShares European Property, you can compare the effects of market volatilities on Citigroup and IShares European 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 European. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and IShares European.
Diversification Opportunities for Citigroup and IShares European
-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 European Property in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares European Property 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 European. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares European Property has no effect on the direction of Citigroup i.e., Citigroup and IShares European go up and down completely randomly.
Pair Corralation between Citigroup and IShares European
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.61 times more return on investment than IShares European. However, Citigroup is 1.61 times more volatile than iShares European Property. It trades about 0.04 of its potential returns per unit of risk. iShares European Property is currently generating about -0.01 per unit of risk. If you would invest 6,534 in Citigroup on October 7, 2024 and sell it today you would earn a total of 566.00 from holding Citigroup or generate 8.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.62% |
| Values | Daily Returns |
Citigroup vs. iShares European Property
Performance |
| Timeline |
| Citigroup |
| iShares European Property |
Citigroup and IShares European Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and IShares European
The main advantage of trading using opposite Citigroup and IShares European positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, IShares European 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 European will offset losses from the drop in IShares European's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| IShares European vs. iShares Corp Bond | IShares European vs. iShares Emerging Asia | IShares European vs. iShares MSCI Global | IShares European vs. iShares Asia Property |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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