Correlation Between Citigroup and IShares Short
Can any of the company-specific risk be diversified away by investing in both Citigroup and IShares Short 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 Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and iShares Short Term, you can compare the effects of market volatilities on Citigroup and IShares Short 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 Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and IShares Short.
Diversification Opportunities for Citigroup and IShares Short
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Citigroup and IShares is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and iShares Short Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Short Term 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 Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Short Term has no effect on the direction of Citigroup i.e., Citigroup and IShares Short go up and down completely randomly.
Pair Corralation between Citigroup and IShares Short
Taking into account the 90-day investment horizon Citigroup is expected to generate 6.64 times more return on investment than IShares Short. However, Citigroup is 6.64 times more volatile than iShares Short Term. It trades about 0.08 of its potential returns per unit of risk. iShares Short Term is currently generating about 0.11 per unit of risk. If you would invest 4,362 in Citigroup on August 30, 2024 and sell it today you would earn a total of 2,654 from holding Citigroup or generate 60.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.75% |
| Values | Daily Returns |
Citigroup vs. iShares Short Term
Performance |
| Timeline |
| Citigroup |
| iShares Short Term |
Citigroup and IShares Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and IShares Short
The main advantage of trading using opposite Citigroup and IShares Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, IShares Short 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 Short will offset losses from the drop in IShares Short's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| IShares Short vs. iShares Conservative Short | IShares Short vs. iShares Conservative Strategic | IShares Short vs. iShares Floating Rate | IShares Short vs. iShares High Quality |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |