Correlation Between Citigroup and IShares Public

Can any of the company-specific risk be diversified away by investing in both Citigroup and IShares Public 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 Public into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Citigroup and iShares Public Limited, you can compare the effects of market volatilities on Citigroup and IShares Public 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 Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and IShares Public.

Diversification Opportunities for Citigroup and IShares Public

-0.85

Correlation Coefficient

Citigroup  IShares Public

Pay attention - limited upside

The 3 months correlation between Citigroup and IShares is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and iShares Public Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Public 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 Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Public has no effect on the direction of Citigroup i.e., Citigroup and IShares Public go up and down completely randomly.

Pair Corralation between Citigroup and IShares Public

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.3 times more return on investment than IShares Public. However, Citigroup is 1.3 times more volatile than iShares Public Limited. It trades about 0.14 of its potential returns per unit of risk. iShares Public Limited is currently generating about -0.16 per unit of risk. If you would invest  6,255  in Citigroup on September 23, 2024 and sell it today you would earn a total of  664.00  from holding Citigroup or generate 10.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	97.73%
Values	Daily Returns

Citigroup  vs.  iShares Public Limited

Citigroup

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain fundamental indicators, Citigroup may actually be approaching a critical reversion point that can send shares even higher in January 2025.

iShares Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares Public Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Etf's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the exchange-traded fund private investors.

Pair Trading with Citigroup and IShares Public

The main advantage of trading using opposite Citigroup and IShares Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, IShares Public 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 Public will offset losses from the drop in IShares Public's long position.

The idea behind Citigroup and iShares Public Limited 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.

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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.