Correlation Between Health Care and CitiGroup
Can any of the company-specific risk be diversified away by investing in both Health Care and CitiGroup 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 Health Care and CitiGroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Health Care Select and CitiGroup, you can compare the effects of market volatilities on Health Care and CitiGroup 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 Health Care with a short position of CitiGroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Health Care and CitiGroup.
Diversification Opportunities for Health Care and CitiGroup
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Health and CitiGroup is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Health Care Select and CitiGroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CitiGroup and Health Care 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 Health Care Select are associated (or correlated) with CitiGroup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CitiGroup has no effect on the direction of Health Care i.e., Health Care and CitiGroup go up and down completely randomly.
Pair Corralation between Health Care and CitiGroup
If you would invest 12,881 in Health Care Select on December 30, 2023 and sell it today you would earn a total of 1,892 from holding Health Care Select or generate 14.69% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
Health Care Select vs. CitiGroup
Performance |
Timeline |
Health Care Select |
CitiGroup |
Risk-Adjusted Performance
0 of 100
Low | High |
Very Weak
Health Care and CitiGroup Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Health Care and CitiGroup
The main advantage of trading using opposite Health Care and CitiGroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Health Care position performs unexpectedly, CitiGroup 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 CitiGroup will offset losses from the drop in CitiGroup's long position.Health Care vs. First Trust Exchange Traded | Health Care vs. Horizon Kinetics Medical | Health Care vs. Harbor Health Care | Health Care vs. Fidelity MSCI Health |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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