Correlation Between Citigroup and FNP Technologies
Can any of the company-specific risk be diversified away by investing in both Citigroup and FNP Technologies 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 FNP Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and FNP Technologies SA, you can compare the effects of market volatilities on Citigroup and FNP Technologies 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 FNP Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and FNP Technologies.
Diversification Opportunities for Citigroup and FNP Technologies
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and FNP is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and FNP Technologies SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FNP Technologies 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 FNP Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FNP Technologies has no effect on the direction of Citigroup i.e., Citigroup and FNP Technologies go up and down completely randomly.
Pair Corralation between Citigroup and FNP Technologies
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.29 times more return on investment than FNP Technologies. However, Citigroup is 3.39 times less risky than FNP Technologies. It trades about 0.07 of its potential returns per unit of risk. FNP Technologies SA is currently generating about -0.13 per unit of risk. If you would invest 6,079 in Citigroup on September 1, 2024 and sell it today you would earn a total of 1,008 from holding Citigroup or generate 16.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 96.92% |
| Values | Daily Returns |
Citigroup vs. FNP Technologies SA
Performance |
| Timeline |
| Citigroup |
| FNP Technologies |
Citigroup and FNP Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and FNP Technologies
The main advantage of trading using opposite Citigroup and FNP Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, FNP Technologies 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 FNP Technologies will offset losses from the drop in FNP Technologies' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| FNP Technologies vs. Novatech Industries SA | FNP Technologies vs. Metalliance SA | FNP Technologies vs. Bilendi | FNP Technologies vs. CMG Cleantech SA |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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