Correlation Between Plexus Corp and Citi Trends

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

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

Diversification Opportunities for Plexus Corp and Citi Trends

0.55

Correlation Coefficient

Plexus Corp  Citi Trends

Very weak diversification

The 3 months correlation between Plexus and Citi is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Plexus Corp and Citi Trends in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citi Trends and Plexus Corp 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 Plexus Corp 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 Plexus Corp i.e., Plexus Corp and Citi Trends go up and down completely randomly.

Pair Corralation between Plexus Corp and Citi Trends

Given the investment horizon of 90 days Plexus Corp is expected to under-perform the Citi Trends. But the stock apears to be less risky and, when comparing its historical volatility, Plexus Corp is 1.86 times less risky than Citi Trends. The stock trades about -0.14 of its potential returns per unit of risk. The Citi Trends is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  2,685  in Citi Trends on December 27, 2024 and sell it today you would lose (408.00) from holding Citi Trends or give up 15.2% of portfolio value over 90 days.

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

Plexus Corp  vs.  Citi Trends

Plexus Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Plexus Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

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.

Pair Trading with Plexus Corp and Citi Trends

The main advantage of trading using opposite Plexus Corp and Citi Trends positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plexus Corp 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 Plexus Corp 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.