Correlation Between Citigroup and Franklin BSP
Can any of the company-specific risk be diversified away by investing in both Citigroup and Franklin BSP 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 Franklin BSP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Franklin BSP Realty, you can compare the effects of market volatilities on Citigroup and Franklin BSP 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 Franklin BSP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Franklin BSP.
Diversification Opportunities for Citigroup and Franklin BSP
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Citigroup and Franklin is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Franklin BSP Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin BSP Realty 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 Franklin BSP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin BSP Realty has no effect on the direction of Citigroup i.e., Citigroup and Franklin BSP go up and down completely randomly.
Pair Corralation between Citigroup and Franklin BSP
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.89 times more return on investment than Franklin BSP. However, Citigroup is 1.89 times more volatile than Franklin BSP Realty. It trades about 0.25 of its potential returns per unit of risk. Franklin BSP Realty is currently generating about 0.0 per unit of risk. If you would invest 6,360 in Citigroup on August 28, 2024 and sell it today you would earn a total of 715.00 from holding Citigroup or generate 11.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Franklin BSP Realty
Performance |
| Timeline |
| Citigroup |
| Franklin BSP Realty |
Citigroup and Franklin BSP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Franklin BSP
The main advantage of trading using opposite Citigroup and Franklin BSP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Franklin BSP 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 Franklin BSP will offset losses from the drop in Franklin BSP's long position.| Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
| Franklin BSP vs. AGNC Investment Corp | Franklin BSP vs. Aquagold International | Franklin BSP vs. Morningstar Unconstrained Allocation | Franklin BSP vs. Thrivent High Yield |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |