Correlation Between Citigroup and Franklin California
Can any of the company-specific risk be diversified away by investing in both Citigroup and Franklin California 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 California into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Franklin California Tax Free, you can compare the effects of market volatilities on Citigroup and Franklin California 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 California. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Franklin California.
Diversification Opportunities for Citigroup and Franklin California
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Franklin is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Franklin California Tax Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin California Tax 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 California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin California Tax has no effect on the direction of Citigroup i.e., Citigroup and Franklin California go up and down completely randomly.
Pair Corralation between Citigroup and Franklin California
Taking into account the 90-day investment horizon Citigroup is expected to generate 6.91 times more return on investment than Franklin California. However, Citigroup is 6.91 times more volatile than Franklin California Tax Free. It trades about 0.16 of its potential returns per unit of risk. Franklin California Tax Free is currently generating about -0.04 per unit of risk. If you would invest 6,083 in Citigroup on August 25, 2024 and sell it today you would earn a total of 901.00 from holding Citigroup or generate 14.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Franklin California Tax Free
Performance |
| Timeline |
| Citigroup |
| Franklin California Tax |
Citigroup and Franklin California Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Franklin California
The main advantage of trading using opposite Citigroup and Franklin California positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Franklin California 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 California will offset losses from the drop in Franklin California's long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
| Franklin California vs. Columbia Small Cap | Franklin California vs. Small Cap Value Series | Franklin California vs. Ab Discovery Value | Franklin California vs. Valic Company I |
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.
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