Correlation Between Citigroup and First Horizon

Can any of the company-specific risk be diversified away by investing in both Citigroup and First Horizon 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 First Horizon into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Citigroup and First Horizon National, you can compare the effects of market volatilities on Citigroup and First Horizon 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 First Horizon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and First Horizon.

Diversification Opportunities for Citigroup and First Horizon

0.39

Correlation Coefficient

Citigroup  First Horizon

Weak diversification

The 3 months correlation between Citigroup and First is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and First Horizon National in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Horizon National 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 First Horizon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Horizon National has no effect on the direction of Citigroup i.e., Citigroup and First Horizon go up and down completely randomly.

Pair Corralation between Citigroup and First Horizon

Taking into account the 90-day investment horizon Citigroup is expected to generate 0.68 times more return on investment than First Horizon. However, Citigroup is 1.47 times less risky than First Horizon. It trades about -0.04 of its potential returns per unit of risk. First Horizon National is currently generating about -0.12 per unit of risk. If you would invest  10,316  in Citigroup on July 30, 2025 and sell it today you would lose (217.00) from holding Citigroup or give up 2.1% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Citigroup  vs.  First Horizon National

Citigroup

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile fundamental indicators, Citigroup may actually be approaching a critical reversion point that can send shares even higher in November 2025.

First Horizon National

Risk-Adjusted Performance

Weakest

Over the last 90 days First Horizon National has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical indicators, First Horizon is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Citigroup and First Horizon

The main advantage of trading using opposite Citigroup and First Horizon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, First Horizon 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 First Horizon will offset losses from the drop in First Horizon's long position.

The idea behind Citigroup and First Horizon National pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.