Correlation Between Hf Foods and Citi Trends

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

By analyzing existing cross correlation between Hf Foods Group and Citi Trends, you can compare the effects of market volatilities on Hf Foods and Citi Trends 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 Hf Foods with a short position of Citi Trends. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hf Foods and Citi Trends.

Diversification Opportunities for Hf Foods and Citi Trends

0.12

Correlation Coefficient

Hf Foods  Citi Trends

Average diversification

The 3 months correlation between HFFG and Citi is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Hf Foods Group and Citi Trends in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citi Trends and Hf Foods 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 Hf Foods Group are associated (or correlated) with Citi Trends. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citi Trends has no effect on the direction of Hf Foods i.e., Hf Foods and Citi Trends go up and down completely randomly.

Pair Corralation between Hf Foods and Citi Trends

Given the investment horizon of 90 days Hf Foods is expected to generate 8.44 times less return on investment than Citi Trends. In addition to that, Hf Foods is 1.23 times more volatile than Citi Trends. It trades about 0.0 of its total potential returns per unit of risk. Citi Trends is currently generating about 0.03 per unit of volatility. If you would invest  2,367  in Citi Trends on October 5, 2024 and sell it today you would earn a total of  282.00  from holding Citi Trends or generate 11.91% return on investment over 90 days.

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

Hf Foods Group  vs.  Citi Trends

Hf Foods Group

Risk-Adjusted Performance

0 of 100

Very Weak

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

Citi Trends

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Citi Trends are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Citi Trends displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hf Foods and Citi Trends

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

The idea behind Hf Foods Group and Citi Trends 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.