Correlation Between Franklin Resources and Citigroup
Can any of the company-specific risk be diversified away by investing in both Franklin Resources and Citigroup 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 Franklin Resources and Citigroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Resources and Citigroup, you can compare the effects of market volatilities on Franklin Resources and Citigroup 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 Franklin Resources with a short position of Citigroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Resources and Citigroup.
Diversification Opportunities for Franklin Resources and Citigroup
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Franklin and Citigroup is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Resources and Citigroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citigroup and Franklin Resources 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 Franklin Resources are associated (or correlated) with Citigroup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citigroup has no effect on the direction of Franklin Resources i.e., Franklin Resources and Citigroup go up and down completely randomly.
Pair Corralation between Franklin Resources and Citigroup
Considering the 90-day investment horizon Franklin Resources is expected to generate 2.86 times less return on investment than Citigroup. In addition to that, Franklin Resources is 1.22 times more volatile than Citigroup. It trades about 0.03 of its total potential returns per unit of risk. Citigroup is currently generating about 0.11 per unit of volatility. If you would invest 4,407 in Citigroup on December 30, 2023 and sell it today you would earn a total of 1,917 from holding Citigroup or generate 43.5% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Franklin Resources vs. Citigroup
Performance |
Timeline |
Franklin Resources |
Citigroup |
Franklin Resources and Citigroup Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Franklin Resources and Citigroup
The main advantage of trading using opposite Franklin Resources and Citigroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Resources position performs unexpectedly, Citigroup 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 Citigroup will offset losses from the drop in Citigroup's long position.Franklin Resources vs. DR Horton | Franklin Resources vs. Cumberland Pharmaceuticals | Franklin Resources vs. ChampionX | Franklin Resources vs. Neogen |
Citigroup vs. Walt Disney | Citigroup vs. General Electric | Citigroup vs. McDonalds | Citigroup vs. International Business Machines |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
Insider Screener Find insiders across different sectors to evaluate their impact on performance |