Correlation Between Citigroup and Franklin FTSE
Can any of the company-specific risk be diversified away by investing in both Citigroup and Franklin FTSE 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 FTSE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Franklin FTSE Europe, you can compare the effects of market volatilities on Citigroup and Franklin FTSE 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 FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Franklin FTSE.
Diversification Opportunities for Citigroup and Franklin FTSE
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and Franklin is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Franklin FTSE Europe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin FTSE Europe 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 FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin FTSE Europe has no effect on the direction of Citigroup i.e., Citigroup and Franklin FTSE go up and down completely randomly.
Pair Corralation between Citigroup and Franklin FTSE
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.71 times more return on investment than Franklin FTSE. However, Citigroup is 2.71 times more volatile than Franklin FTSE Europe. It trades about 0.14 of its potential returns per unit of risk. Franklin FTSE Europe is currently generating about -0.27 per unit of risk. If you would invest 6,205 in Citigroup on August 29, 2024 and sell it today you would earn a total of 770.00 from holding Citigroup or generate 12.41% 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 FTSE Europe
Performance |
| Timeline |
| Citigroup |
| Franklin FTSE Europe |
Citigroup and Franklin FTSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Franklin FTSE
The main advantage of trading using opposite Citigroup and Franklin FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Franklin FTSE 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 FTSE will offset losses from the drop in Franklin FTSE's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Franklin FTSE vs. Franklin FTSE United | Franklin FTSE vs. SPDR Portfolio Europe | Franklin FTSE vs. Franklin FTSE Germany | Franklin FTSE vs. Franklin FTSE Japan |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |