Correlation Between Citi Trends and Figs

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

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

Diversification Opportunities for Citi Trends and Figs

0.75

Correlation Coefficient

Citi Trends  Figs

Poor diversification

The 3 months correlation between Citi and Figs is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Citi Trends and Figs Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Figs Inc 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 Figs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Figs Inc has no effect on the direction of Citi Trends i.e., Citi Trends and Figs go up and down completely randomly.

Pair Corralation between Citi Trends and Figs

Given the investment horizon of 90 days Citi Trends is expected to under-perform the Figs. In addition to that, Citi Trends is 1.04 times more volatile than Figs Inc. It trades about -0.09 of its total potential returns per unit of risk. Figs Inc is currently generating about -0.08 per unit of volatility. If you would invest  601.00  in Figs Inc on December 27, 2024 and sell it today you would lose (118.00) from holding Figs Inc or give up 19.63% of portfolio value over 90 days.

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

Citi Trends  vs.  Figs Inc

Citi Trends

Risk-Adjusted Performance

Very Weak

Over the last 90 days Citi Trends has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Figs Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Figs Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Citi Trends and Figs

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

The idea behind Citi Trends and Figs Inc 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.

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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.