Correlation Between Citigroup and Blackrock Bal
Can any of the company-specific risk be diversified away by investing in both Citigroup and Blackrock Bal 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 Blackrock Bal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Blackrock Bal Cap, you can compare the effects of market volatilities on Citigroup and Blackrock Bal 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 Blackrock Bal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Blackrock Bal.
Diversification Opportunities for Citigroup and Blackrock Bal
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citigroup and Blackrock is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Blackrock Bal Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Bal Cap 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 Blackrock Bal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Bal Cap has no effect on the direction of Citigroup i.e., Citigroup and Blackrock Bal go up and down completely randomly.
Pair Corralation between Citigroup and Blackrock Bal
Taking into account the 90-day investment horizon Citigroup is expected to generate 5.39 times more return on investment than Blackrock Bal. However, Citigroup is 5.39 times more volatile than Blackrock Bal Cap. It trades about 0.29 of its potential returns per unit of risk. Blackrock Bal Cap is currently generating about 0.03 per unit of risk. If you would invest 6,122 in Citigroup on August 26, 2024 and sell it today you would earn a total of 862.00 from holding Citigroup or generate 14.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Blackrock Bal Cap
Performance |
| Timeline |
| Citigroup |
| Blackrock Bal Cap |
Citigroup and Blackrock Bal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Blackrock Bal
The main advantage of trading using opposite Citigroup and Blackrock Bal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Blackrock Bal 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 Blackrock Bal will offset losses from the drop in Blackrock Bal's long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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