Correlation Between Citigroup and Blackrock Advantage
Can any of the company-specific risk be diversified away by investing in both Citigroup and Blackrock Advantage 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 Advantage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Blackrock Advantage Total, you can compare the effects of market volatilities on Citigroup and Blackrock Advantage 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 Advantage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Blackrock Advantage.
Diversification Opportunities for Citigroup and Blackrock Advantage
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Citigroup and BlackRock is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Blackrock Advantage Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Advantage Total 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 Advantage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Advantage Total has no effect on the direction of Citigroup i.e., Citigroup and Blackrock Advantage go up and down completely randomly.
Pair Corralation between Citigroup and Blackrock Advantage
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.97 times more return on investment than Blackrock Advantage. However, Citigroup is 1.97 times more volatile than Blackrock Advantage Total. It trades about 0.45 of its potential returns per unit of risk. Blackrock Advantage Total is currently generating about 0.29 per unit of risk. If you would invest 6,994 in Citigroup on November 2, 2024 and sell it today you would earn a total of 1,192 from holding Citigroup or generate 17.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Citigroup vs. Blackrock Advantage Total
Performance |
| Timeline |
| Citigroup |
| Blackrock Advantage Total |
Citigroup and Blackrock Advantage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Blackrock Advantage
The main advantage of trading using opposite Citigroup and Blackrock Advantage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Blackrock Advantage 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 Advantage will offset losses from the drop in Blackrock Advantage's long position.| Citigroup vs. Royal Bank of | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Canadian Imperial Bank |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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