Correlation Between Citigroup and TechnipFMC PLC
Can any of the company-specific risk be diversified away by investing in both Citigroup and TechnipFMC PLC 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 TechnipFMC PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and TechnipFMC PLC, you can compare the effects of market volatilities on Citigroup and TechnipFMC PLC 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 TechnipFMC PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and TechnipFMC PLC.
Diversification Opportunities for Citigroup and TechnipFMC PLC
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Citigroup and TechnipFMC is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and TechnipFMC PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TechnipFMC PLC 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 TechnipFMC PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TechnipFMC PLC has no effect on the direction of Citigroup i.e., Citigroup and TechnipFMC PLC go up and down completely randomly.
Pair Corralation between Citigroup and TechnipFMC PLC
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.79 times more return on investment than TechnipFMC PLC. However, Citigroup is 1.26 times less risky than TechnipFMC PLC. It trades about 0.15 of its potential returns per unit of risk. TechnipFMC PLC is currently generating about 0.07 per unit of risk. If you would invest 3,758 in Citigroup on August 26, 2024 and sell it today you would earn a total of 3,226 from holding Citigroup or generate 85.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.26% |
| Values | Daily Returns |
Citigroup vs. TechnipFMC PLC
Performance |
| Timeline |
| Citigroup |
| TechnipFMC PLC |
Citigroup and TechnipFMC PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and TechnipFMC PLC
The main advantage of trading using opposite Citigroup and TechnipFMC PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, TechnipFMC PLC 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 TechnipFMC PLC will offset losses from the drop in TechnipFMC PLC's long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
| TechnipFMC PLC vs. Zoom Video Communications | TechnipFMC PLC vs. Enbridge | TechnipFMC PLC vs. Endo International PLC | TechnipFMC PLC vs. Diversified Energy |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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