Correlation Between Citigroup and Templeton Emerging
Can any of the company-specific risk be diversified away by investing in both Citigroup and Templeton Emerging 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 Templeton Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Templeton Emerging Mkt, you can compare the effects of market volatilities on Citigroup and Templeton Emerging 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 Templeton Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Templeton Emerging.
Diversification Opportunities for Citigroup and Templeton Emerging
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Citigroup and Templeton is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Templeton Emerging Mkt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton Emerging Mkt 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 Templeton Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Templeton Emerging Mkt has no effect on the direction of Citigroup i.e., Citigroup and Templeton Emerging go up and down completely randomly.
Pair Corralation between Citigroup and Templeton Emerging
Taking into account the 90-day investment horizon Citigroup is expected to generate 3.12 times more return on investment than Templeton Emerging. However, Citigroup is 3.12 times more volatile than Templeton Emerging Mkt. It trades about 0.11 of its potential returns per unit of risk. Templeton Emerging Mkt is currently generating about -0.01 per unit of risk. If you would invest 5,308 in Citigroup on November 3, 2024 and sell it today you would earn a total of 2,835 from holding Citigroup or generate 53.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.18% |
| Values | Daily Returns |
Citigroup vs. Templeton Emerging Mkt
Performance |
| Timeline |
| Citigroup |
| Templeton Emerging Mkt |
Citigroup and Templeton Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Templeton Emerging
The main advantage of trading using opposite Citigroup and Templeton Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Templeton Emerging 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 Templeton Emerging will offset losses from the drop in Templeton Emerging's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Templeton Emerging vs. Groupama Entreprises N | Templeton Emerging vs. Renaissance Europe C | Templeton Emerging vs. Superior Plus Corp | Templeton Emerging vs. Origin Agritech |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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