Correlation Between Citigroup and Blackrock Muniholdings

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Can any of the company-specific risk be diversified away by investing in both Citigroup and Blackrock Muniholdings 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 Blackrock Muniholdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Blackrock Muniholdings Quality, you can compare the effects of market volatilities on Citigroup and Blackrock Muniholdings 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 Blackrock Muniholdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Blackrock Muniholdings.

Diversification Opportunities for Citigroup and Blackrock Muniholdings

CitigroupBlackrockDiversified AwayCitigroupBlackrockDiversified Away100%
0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Citigroup and Blackrock is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Blackrock Muniholdings Quality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Muniholdings 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 Blackrock Muniholdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Muniholdings has no effect on the direction of Citigroup i.e., Citigroup and Blackrock Muniholdings go up and down completely randomly.

Pair Corralation between Citigroup and Blackrock Muniholdings

If you would invest  6,203  in Citigroup on September 22, 2024 and sell it today you would earn a total of  716.00  from holding Citigroup or generate 11.54% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Citigroup  vs.  Blackrock Muniholdings Quality

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -5051015
JavaScript chart by amCharts 3.21.15C MUS
       Timeline  
Citigroup 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
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 unfluctuating fundamental indicators, Citigroup may actually be approaching a critical reversion point that can send shares even higher in January 2025.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec6062646668707274
Blackrock Muniholdings 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Blackrock Muniholdings Quality has generated negative risk-adjusted returns adding no value to fund investors. In spite of comparatively stable basic indicators, Blackrock Muniholdings is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Citigroup and Blackrock Muniholdings Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-5.77-4.32-2.87-1.420.02531.523.034.556.06 0.020.040.060.080.100.12
JavaScript chart by amCharts 3.21.15C MUS
       Returns  

Pair Trading with Citigroup and Blackrock Muniholdings

The main advantage of trading using opposite Citigroup and Blackrock Muniholdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Blackrock Muniholdings 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 Blackrock Muniholdings will offset losses from the drop in Blackrock Muniholdings' long position.
The idea behind Citigroup and Blackrock Muniholdings Quality 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.
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.

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