Correlation Between Citi Trends and Silo Pharma

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

By analyzing existing cross correlation between Citi Trends and Silo Pharma, you can compare the effects of market volatilities on Citi Trends and Silo Pharma 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 Silo Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citi Trends and Silo Pharma.

Diversification Opportunities for Citi Trends and Silo Pharma

-0.19

Correlation Coefficient

Citi Trends  Silo Pharma

Good diversification

The 3 months correlation between Citi and Silo is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Citi Trends and Silo Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silo Pharma 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 Silo Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silo Pharma has no effect on the direction of Citi Trends i.e., Citi Trends and Silo Pharma go up and down completely randomly.

Pair Corralation between Citi Trends and Silo Pharma

Given the investment horizon of 90 days Citi Trends is expected to under-perform the Silo Pharma. But the stock apears to be less risky and, when comparing its historical volatility, Citi Trends is 4.35 times less risky than Silo Pharma. The stock trades about -0.03 of its potential returns per unit of risk. The Silo Pharma is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  120.00  in Silo Pharma on September 3, 2024 and sell it today you would lose (20.00) from holding Silo Pharma or give up 16.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Citi Trends  vs.  Silo Pharma

Citi Trends

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Citi Trends are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Citi Trends displayed solid returns over the last few months and may actually be approaching a breakup point.

Silo Pharma

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Citi Trends and Silo Pharma

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

The idea behind Citi Trends and Silo Pharma 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.