Correlation Between Citigroup and IShares Thematic
Can any of the company-specific risk be diversified away by investing in both Citigroup and IShares Thematic 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 Thematic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and iShares Thematic Rotation, you can compare the effects of market volatilities on Citigroup and IShares Thematic 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 Thematic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and IShares Thematic.
Diversification Opportunities for Citigroup and IShares Thematic
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Citigroup and IShares is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and iShares Thematic Rotation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Thematic Rotation 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 Thematic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Thematic Rotation has no effect on the direction of Citigroup i.e., Citigroup and IShares Thematic go up and down completely randomly.
Pair Corralation between Citigroup and IShares Thematic
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.82 times more return on investment than IShares Thematic. However, Citigroup is 1.82 times more volatile than iShares Thematic Rotation. It trades about 0.11 of its potential returns per unit of risk. iShares Thematic Rotation is currently generating about 0.15 per unit of risk. If you would invest 4,788 in Citigroup on September 12, 2024 and sell it today you would earn a total of 2,408 from holding Citigroup or generate 50.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. iShares Thematic Rotation
Performance |
| Timeline |
| Citigroup |
| iShares Thematic Rotation |
Citigroup and IShares Thematic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and IShares Thematic
The main advantage of trading using opposite Citigroup and IShares Thematic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, IShares Thematic 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 Thematic will offset losses from the drop in IShares Thematic's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| IShares Thematic vs. Vanguard SP 500 | IShares Thematic vs. Vanguard Real Estate | IShares Thematic vs. Vanguard Total Bond | IShares Thematic vs. Vanguard High Dividend |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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