Correlation Between FBD Holdings and Citigroup
Can any of the company-specific risk be diversified away by investing in both FBD Holdings 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 FBD Holdings and Citigroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FBD Holdings PLC and Citigroup, you can compare the effects of market volatilities on FBD Holdings 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 FBD Holdings with a short position of Citigroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of FBD Holdings and Citigroup.
Diversification Opportunities for FBD Holdings and Citigroup
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between FBD and Citigroup is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding FBD Holdings PLC and Citigroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citigroup and FBD Holdings 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 FBD Holdings PLC 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 FBD Holdings i.e., FBD Holdings and Citigroup go up and down completely randomly.
Pair Corralation between FBD Holdings and Citigroup
Assuming the 90 days trading horizon FBD Holdings PLC is expected to generate 1.28 times more return on investment than Citigroup. However, FBD Holdings is 1.28 times more volatile than Citigroup. It trades about 0.05 of its potential returns per unit of risk. Citigroup is currently generating about 0.06 per unit of risk. If you would invest 906.00 in FBD Holdings PLC on January 25, 2024 and sell it today you would earn a total of 499.00 from holding FBD Holdings PLC or generate 55.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.48% |
| Values | Daily Returns |
FBD Holdings PLC vs. Citigroup
Performance |
| Timeline |
| FBD Holdings PLC |
| Citigroup |
FBD Holdings and Citigroup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FBD Holdings and Citigroup
The main advantage of trading using opposite FBD Holdings and Citigroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FBD Holdings 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.| FBD Holdings vs. Glanbia PLC | FBD Holdings vs. Kingspan Group plc | FBD Holdings vs. Kerry Group | FBD Holdings vs. Smurfit Kappa Group |
| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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