Correlation Between Citi Trends and MedPeerInc
Can any of the company-specific risk be diversified away by investing in both Citi Trends and MedPeerInc 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 Citi Trends and MedPeerInc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citi Trends and MedPeerInc, you can compare the effects of market volatilities on Citi Trends and MedPeerInc 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 Citi Trends with a short position of MedPeerInc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citi Trends and MedPeerInc.
Diversification Opportunities for Citi Trends and MedPeerInc
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citi and MedPeerInc is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Citi Trends and MedPeerInc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MedPeerInc and Citi Trends 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 Citi Trends are associated (or correlated) with MedPeerInc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MedPeerInc has no effect on the direction of Citi Trends i.e., Citi Trends and MedPeerInc go up and down completely randomly.
Pair Corralation between Citi Trends and MedPeerInc
Given the investment horizon of 90 days Citi Trends is expected to generate 1.18 times more return on investment than MedPeerInc. However, Citi Trends is 1.18 times more volatile than MedPeerInc. It trades about 0.16 of its potential returns per unit of risk. MedPeerInc is currently generating about -0.15 per unit of risk. If you would invest 1,838 in Citi Trends on September 24, 2024 and sell it today you would earn a total of 731.00 from holding Citi Trends or generate 39.77% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 98.46% |
Values | Daily Returns |
Citi Trends vs. MedPeerInc
Performance |
Timeline |
Citi Trends |
MedPeerInc |
Citi Trends and MedPeerInc Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Citi Trends and MedPeerInc
The main advantage of trading using opposite Citi Trends and MedPeerInc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citi Trends position performs unexpectedly, MedPeerInc 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 MedPeerInc will offset losses from the drop in MedPeerInc's long position.Citi Trends vs. Macys Inc | Citi Trends vs. 1StdibsCom | Citi Trends vs. AutoNation | Citi Trends vs. Boqii Holding Limited |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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