Correlation Between Citigroup and William Blair
Can any of the company-specific risk be diversified away by investing in both Citigroup and William Blair 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 William Blair into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and William Blair Small Mid, you can compare the effects of market volatilities on Citigroup and William Blair 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 William Blair. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and William Blair.
Diversification Opportunities for Citigroup and William Blair
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and William is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and William Blair Small Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on William Blair Small 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 William Blair. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of William Blair Small has no effect on the direction of Citigroup i.e., Citigroup and William Blair go up and down completely randomly.
Pair Corralation between Citigroup and William Blair
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.85 times more return on investment than William Blair. However, Citigroup is 1.85 times more volatile than William Blair Small Mid. It trades about 0.07 of its potential returns per unit of risk. William Blair Small Mid is currently generating about 0.12 per unit of risk. If you would invest 6,079 in Citigroup on September 1, 2024 and sell it today you would earn a total of 1,008 from holding Citigroup or generate 16.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
Citigroup vs. William Blair Small Mid
Performance |
| Timeline |
| Citigroup |
| William Blair Small |
Citigroup and William Blair Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and William Blair
The main advantage of trading using opposite Citigroup and William Blair positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, William Blair 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 William Blair will offset losses from the drop in William Blair's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| William Blair vs. Pnc Emerging Markets | William Blair vs. Angel Oak Multi Strategy | William Blair vs. Barings Emerging Markets | William Blair vs. Goldman Sachs Emerging |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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