Correlation Between Burlington Stores and Citi Trends
Can any of the company-specific risk be diversified away by investing in both Burlington Stores 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 Burlington Stores and Citi Trends into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Burlington Stores and Citi Trends, you can compare the effects of market volatilities on Burlington Stores 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 Burlington Stores with a short position of Citi Trends. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burlington Stores and Citi Trends.
Diversification Opportunities for Burlington Stores and Citi Trends
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Burlington and Citi is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Burlington Stores and Citi Trends in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citi Trends and Burlington Stores 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 Burlington Stores 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 Burlington Stores i.e., Burlington Stores and Citi Trends go up and down completely randomly.
Pair Corralation between Burlington Stores and Citi Trends
Given the investment horizon of 90 days Burlington Stores is expected to generate 4.39 times less return on investment than Citi Trends. But when comparing it to its historical volatility, Burlington Stores is 1.55 times less risky than Citi Trends. It trades about 0.07 of its potential returns per unit of risk. Citi Trends is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1,432 in Citi Trends on August 28, 2024 and sell it today you would earn a total of 525.00 from holding Citi Trends or generate 36.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Burlington Stores vs. Citi Trends
Performance |
| Timeline |
| Burlington Stores |
| Citi Trends |
Burlington Stores and Citi Trends Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Burlington Stores and Citi Trends
The main advantage of trading using opposite Burlington Stores and Citi Trends positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burlington Stores 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.| Burlington Stores vs. The TJX Companies | Burlington Stores vs. Guess Inc | Burlington Stores vs. Urban Outfitters | Burlington Stores vs. Childrens Place |
| Citi Trends vs. JJill Inc | Citi Trends vs. Zumiez Inc | Citi Trends vs. Tillys Inc | Citi Trends vs. Duluth Holdings |
Check out your portfolio center.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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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