Correlation Between Citigroup and Templeton Global
Can any of the company-specific risk be diversified away by investing in both Citigroup and Templeton Global 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 Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Templeton Global Balanced, you can compare the effects of market volatilities on Citigroup and Templeton Global 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 Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Templeton Global.
Diversification Opportunities for Citigroup and Templeton Global
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and Templeton is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Templeton Global Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton Global Balanced 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 Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Templeton Global Balanced has no effect on the direction of Citigroup i.e., Citigroup and Templeton Global go up and down completely randomly.
Pair Corralation between Citigroup and Templeton Global
Taking into account the 90-day investment horizon Citigroup is expected to generate 3.11 times more return on investment than Templeton Global. However, Citigroup is 3.11 times more volatile than Templeton Global Balanced. It trades about 0.42 of its potential returns per unit of risk. Templeton Global Balanced is currently generating about 0.15 per unit of risk. If you would invest 6,812 in Citigroup on October 19, 2024 and sell it today you would earn a total of 1,039 from holding Citigroup or generate 15.25% 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. Templeton Global Balanced
Performance |
| Timeline |
| Citigroup |
| Templeton Global Balanced |
Citigroup and Templeton Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Templeton Global
The main advantage of trading using opposite Citigroup and Templeton Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Templeton Global 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 Global will offset losses from the drop in Templeton Global's long position.| Citigroup vs. Nu Holdings | Citigroup vs. Canadian Imperial Bank | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
| Templeton Global vs. Ab Select Equity | Templeton Global vs. Old Westbury Fixed | Templeton Global vs. Greenspring Fund Retail | Templeton Global vs. Locorr Dynamic Equity |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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