Correlation Between Citigroup and Franklin International
Can any of the company-specific risk be diversified away by investing in both Citigroup and Franklin International 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 International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Franklin International Core, you can compare the effects of market volatilities on Citigroup and Franklin International 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 International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Franklin International.
Diversification Opportunities for Citigroup and Franklin International
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and Franklin is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Franklin International Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin International 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 International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin International has no effect on the direction of Citigroup i.e., Citigroup and Franklin International go up and down completely randomly.
Pair Corralation between Citigroup and Franklin International
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.04 times more return on investment than Franklin International. However, Citigroup is 2.04 times more volatile than Franklin International Core. It trades about 0.07 of its potential returns per unit of risk. Franklin International Core is currently generating about 0.06 per unit of risk. If you would invest 4,206 in Citigroup on August 26, 2024 and sell it today you would earn a total of 2,778 from holding Citigroup or generate 66.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Franklin International Core
Performance |
| Timeline |
| Citigroup |
| Franklin International |
Citigroup and Franklin International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Franklin International
The main advantage of trading using opposite Citigroup and Franklin International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Franklin International 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 International will offset losses from the drop in Franklin International's long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
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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