Correlation Between Fundamental Income and Citi Trends

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

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

Diversification Opportunities for Fundamental Income and Citi Trends

-0.44

Correlation Coefficient

Fundamental Income  Citi Trends

Very good diversification

The 3 months correlation between Fundamental and Citi is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Fundamental Income Net and Citi Trends in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citi Trends and Fundamental Income 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 Fundamental Income Net 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 Fundamental Income i.e., Fundamental Income and Citi Trends go up and down completely randomly.

Pair Corralation between Fundamental Income and Citi Trends

Given the investment horizon of 90 days Fundamental Income Net is expected to under-perform the Citi Trends. But the etf apears to be less risky and, when comparing its historical volatility, Fundamental Income Net is 4.49 times less risky than Citi Trends. The etf trades about -0.16 of its potential returns per unit of risk. The Citi Trends is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  1,680  in Citi Trends on September 16, 2024 and sell it today you would earn a total of  798.00  from holding Citi Trends or generate 47.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Fundamental Income Net  vs.  Citi Trends

Fundamental Income Net

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fundamental Income Net has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Etf's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the ETF venture institutional investors.

Citi Trends

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Citi Trends are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, Citi Trends displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fundamental Income and Citi Trends

The main advantage of trading using opposite Fundamental Income and Citi Trends positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fundamental Income 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 Fundamental Income Net 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.