Correlation Between Citi Trends and Fundamental Income

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

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

Diversification Opportunities for Citi Trends and Fundamental Income

-0.44

Correlation Coefficient

Citi Trends  Fundamental Income

Very good diversification

The 3 months correlation between Citi and Fundamental is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Citi Trends and Fundamental Income Net in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fundamental Income Net 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 Fundamental Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fundamental Income Net has no effect on the direction of Citi Trends i.e., Citi Trends and Fundamental Income go up and down completely randomly.

Pair Corralation between Citi Trends and Fundamental Income

Given the investment horizon of 90 days Citi Trends is expected to generate 4.49 times more return on investment than Fundamental Income. However, Citi Trends is 4.49 times more volatile than Fundamental Income Net. It trades about 0.19 of its potential returns per unit of risk. Fundamental Income Net is currently generating about -0.16 per unit of risk. If you would invest  1,680  in Citi Trends on September 16, 2024 and sell it today you would earn a total of  798.00  from holding Citi Trends or generate 47.5% return on investment over 90 days.

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

Citi Trends  vs.  Fundamental Income Net

Citi Trends

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Citi Trends are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, Citi Trends displayed solid returns over the last few months and may actually be approaching a breakup point.

Fundamental Income Net

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fundamental Income Net has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Etf's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the ETF venture institutional investors.

Pair Trading with Citi Trends and Fundamental Income

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

The idea behind Citi Trends and Fundamental Income Net 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.