Correlation Between Citi Trends and 06050WHM0

Can any of the company-specific risk be diversified away by investing in both Citi Trends and 06050WHM0 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 06050WHM0 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Citi Trends and US06050WHM01, you can compare the effects of market volatilities on Citi Trends and 06050WHM0 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 06050WHM0. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citi Trends and 06050WHM0.

Diversification Opportunities for Citi Trends and 06050WHM0

0.06

Correlation Coefficient

Citi Trends  06050WHM0

Significant diversification

The 3 months correlation between Citi and 06050WHM0 is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Citi Trends and US06050WHM01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US06050WHM01 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 06050WHM0. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US06050WHM01 has no effect on the direction of Citi Trends i.e., Citi Trends and 06050WHM0 go up and down completely randomly.

Pair Corralation between Citi Trends and 06050WHM0

Given the investment horizon of 90 days Citi Trends is expected to under-perform the 06050WHM0. In addition to that, Citi Trends is 1.8 times more volatile than US06050WHM01. It trades about -0.05 of its total potential returns per unit of risk. US06050WHM01 is currently generating about 0.07 per unit of volatility. If you would invest  8,835  in US06050WHM01 on December 29, 2024 and sell it today you would earn a total of  422.00  from holding US06050WHM01 or generate 4.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	55.74%
Values	Daily Returns

Citi Trends  vs.  US06050WHM01

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 conflicting 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.

US06050WHM01

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in US06050WHM01 are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, 06050WHM0 may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Citi Trends and 06050WHM0

The main advantage of trading using opposite Citi Trends and 06050WHM0 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citi Trends position performs unexpectedly, 06050WHM0 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 06050WHM0 will offset losses from the drop in 06050WHM0's long position.

The idea behind Citi Trends and US06050WHM01 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.