Correlation Between Citigroup and Blackrock
Can any of the company-specific risk be diversified away by investing in both Citigroup and Blackrock 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 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Blackrock Pa Muni, you can compare the effects of market volatilities on Citigroup and Blackrock 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. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Blackrock.
Diversification Opportunities for Citigroup and Blackrock
Good diversification
The 3 months correlation between Citigroup and Blackrock is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Blackrock Pa Muni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Pa Muni 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. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Pa Muni has no effect on the direction of Citigroup i.e., Citigroup and Blackrock go up and down completely randomly.
Pair Corralation between Citigroup and Blackrock
Taking into account the 90-day investment horizon Citigroup is expected to generate 5.64 times more return on investment than Blackrock. However, Citigroup is 5.64 times more volatile than Blackrock Pa Muni. It trades about 0.21 of its potential returns per unit of risk. Blackrock Pa Muni is currently generating about 0.24 per unit of risk. If you would invest 6,360 in Citigroup on August 28, 2024 and sell it today you would earn a total of 615.00 from holding Citigroup or generate 9.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Blackrock Pa Muni
Performance |
| Timeline |
| Citigroup |
| Blackrock Pa Muni |
Citigroup and Blackrock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Blackrock
The main advantage of trading using opposite Citigroup and Blackrock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Blackrock 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 will offset losses from the drop in Blackrock's long position.The idea behind Citigroup and Blackrock Pa Muni pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Blackrock vs. Royce Opportunity Fund | Blackrock vs. Applied Finance Explorer | Blackrock vs. Ultramid Cap Profund Ultramid Cap | Blackrock vs. Ultrasmall Cap Profund Ultrasmall Cap |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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