Correlation Between Citi Trends and Buckle
Can any of the company-specific risk be diversified away by investing in both Citi Trends and Buckle 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 Buckle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citi Trends and Buckle Inc, you can compare the effects of market volatilities on Citi Trends and Buckle 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 Buckle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citi Trends and Buckle.
Diversification Opportunities for Citi Trends and Buckle
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Citi and Buckle is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Citi Trends and Buckle Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Buckle Inc 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 Buckle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Buckle Inc has no effect on the direction of Citi Trends i.e., Citi Trends and Buckle go up and down completely randomly.
Pair Corralation between Citi Trends and Buckle
Given the investment horizon of 90 days Citi Trends is expected to under-perform the Buckle. In addition to that, Citi Trends is 1.52 times more volatile than Buckle Inc. It trades about -0.02 of its total potential returns per unit of risk. Buckle Inc is currently generating about 0.04 per unit of volatility. If you would invest 3,727 in Buckle Inc on August 27, 2024 and sell it today you would earn a total of 1,159 from holding Buckle Inc or generate 31.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citi Trends vs. Buckle Inc
Performance |
| Timeline |
| Citi Trends |
| Buckle Inc |
Citi Trends and Buckle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citi Trends and Buckle
The main advantage of trading using opposite Citi Trends and Buckle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citi Trends position performs unexpectedly, Buckle 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 Buckle will offset losses from the drop in Buckle's long position.| 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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