Correlation Between Citi Trends and Plexus Corp

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

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

Diversification Opportunities for Citi Trends and Plexus Corp

0.55

Correlation Coefficient

Citi Trends  Plexus Corp

Very weak diversification

The 3 months correlation between Citi and Plexus is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Citi Trends and Plexus Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plexus Corp 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 Plexus Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plexus Corp has no effect on the direction of Citi Trends i.e., Citi Trends and Plexus Corp go up and down completely randomly.

Pair Corralation between Citi Trends and Plexus Corp

Given the investment horizon of 90 days Citi Trends is expected to generate 1.86 times more return on investment than Plexus Corp. However, Citi Trends is 1.86 times more volatile than Plexus Corp. It trades about -0.05 of its potential returns per unit of risk. Plexus Corp is currently generating about -0.14 per unit of risk. If you would invest  2,685  in Citi Trends on December 27, 2024 and sell it today you would lose (408.00) from holding Citi Trends or give up 15.2% of portfolio value over 90 days.

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

Citi Trends  vs.  Plexus Corp

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 latest weak performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Plexus Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Plexus Corp 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 basic 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 Plexus Corp

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

The idea behind Citi Trends and Plexus Corp 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.