Correlation Between Citi Trends and Space-Communication

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

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

Diversification Opportunities for Citi Trends and Space-Communication

0.0

Correlation Coefficient

Citi Trends  Space-Communication

Pay attention - limited upside

The 3 months correlation between Citi and Space-Communication is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Citi Trends and Space Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Space Communication 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 Space-Communication. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Space Communication has no effect on the direction of Citi Trends i.e., Citi Trends and Space-Communication go up and down completely randomly.

Pair Corralation between Citi Trends and Space-Communication

If you would invest  20.00  in Space Communication on December 3, 2024 and sell it today you would earn a total of  0.00  from holding Space Communication or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	93.02%
Values	Daily Returns

Citi Trends  vs.  Space Communication

Citi Trends

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citi Trends are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Citi Trends may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Space Communication

Risk-Adjusted Performance

Very Weak

Over the last 90 days Space Communication has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, Space-Communication is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Citi Trends and Space-Communication

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

The idea behind Citi Trends and Space Communication 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.