Correlation Between Citi Trends and Under Armour

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

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

Diversification Opportunities for Citi Trends and Under Armour

0.55

Correlation Coefficient

Citi Trends  Under Armour

Very weak diversification

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

Pair Corralation between Citi Trends and Under Armour

Given the investment horizon of 90 days Citi Trends is expected to under-perform the Under Armour. In addition to that, Citi Trends is 1.9 times more volatile than Under Armour C. It trades about -0.09 of its total potential returns per unit of risk. Under Armour C is currently generating about -0.16 per unit of volatility. If you would invest  765.00  in Under Armour C on December 26, 2024 and sell it today you would lose (144.00) from holding Under Armour C or give up 18.82% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Citi Trends  vs.  Under Armour C

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.

Under Armour C

Risk-Adjusted Performance

Very Weak

Over the last 90 days Under Armour C has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Citi Trends and Under Armour

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

The idea behind Citi Trends and Under Armour C 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.