Correlation Between Citigroup and SPDR Blackstone
Can any of the company-specific risk be diversified away by investing in both Citigroup and SPDR Blackstone 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 SPDR Blackstone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and SPDR Blackstone Senior, you can compare the effects of market volatilities on Citigroup and SPDR Blackstone 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 SPDR Blackstone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and SPDR Blackstone.
Diversification Opportunities for Citigroup and SPDR Blackstone
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and SPDR is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and SPDR Blackstone Senior in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Blackstone Senior 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 SPDR Blackstone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Blackstone Senior has no effect on the direction of Citigroup i.e., Citigroup and SPDR Blackstone go up and down completely randomly.
Pair Corralation between Citigroup and SPDR Blackstone
Taking into account the 90-day investment horizon Citigroup is expected to generate 15.62 times more return on investment than SPDR Blackstone. However, Citigroup is 15.62 times more volatile than SPDR Blackstone Senior. It trades about 0.2 of its potential returns per unit of risk. SPDR Blackstone Senior is currently generating about 0.3 per unit of risk. If you would invest 6,412 in Citigroup on August 30, 2024 and sell it today you would earn a total of 604.00 from holding Citigroup or generate 9.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. SPDR Blackstone Senior
Performance |
| Timeline |
| Citigroup |
| SPDR Blackstone Senior |
Citigroup and SPDR Blackstone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and SPDR Blackstone
The main advantage of trading using opposite Citigroup and SPDR Blackstone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, SPDR Blackstone 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 SPDR Blackstone will offset losses from the drop in SPDR Blackstone's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| SPDR Blackstone vs. Invesco Senior Loan | SPDR Blackstone vs. First Trust Senior | SPDR Blackstone vs. SPDR Bloomberg Short | SPDR Blackstone vs. SPDR Bloomberg Investment |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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