Correlation Between Citi Trends and TTM Technologies

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

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

Diversification Opportunities for Citi Trends and TTM Technologies

0.51

Correlation Coefficient

Citi Trends  TTM Technologies

Very weak diversification

The 3 months correlation between Citi and TTM is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Citi Trends and TTM Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TTM Technologies 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 TTM Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TTM Technologies has no effect on the direction of Citi Trends i.e., Citi Trends and TTM Technologies go up and down completely randomly.

Pair Corralation between Citi Trends and TTM Technologies

Given the investment horizon of 90 days Citi Trends is expected to generate 1.6 times more return on investment than TTM Technologies. However, Citi Trends is 1.6 times more volatile than TTM Technologies. It trades about 0.0 of its potential returns per unit of risk. TTM Technologies is currently generating about -0.1 per unit of risk. If you would invest  2,439  in Citi Trends on December 5, 2024 and sell it today you would lose (50.00) from holding Citi Trends or give up 2.05% 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.  TTM Technologies

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 very healthy basic indicators, Citi Trends is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

TTM Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days TTM Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's primary indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Citi Trends and TTM Technologies

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

The idea behind Citi Trends and TTM Technologies 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.