Correlation Between Citi Trends and Capri Holdings
Can any of the company-specific risk be diversified away by investing in both Citi Trends and Capri Holdings 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 Capri Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citi Trends and Capri Holdings, you can compare the effects of market volatilities on Citi Trends and Capri Holdings 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 Capri Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citi Trends and Capri Holdings.
Diversification Opportunities for Citi Trends and Capri Holdings
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Citi and Capri is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Citi Trends and Capri Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capri Holdings 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 Capri Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capri Holdings has no effect on the direction of Citi Trends i.e., Citi Trends and Capri Holdings go up and down completely randomly.
Pair Corralation between Citi Trends and Capri Holdings
Given the investment horizon of 90 days Citi Trends is expected to generate 2.37 times less return on investment than Capri Holdings. In addition to that, Citi Trends is 1.05 times more volatile than Capri Holdings. It trades about 0.09 of its total potential returns per unit of risk. Capri Holdings is currently generating about 0.23 per unit of volatility. If you would invest 2,010 in Capri Holdings on September 2, 2024 and sell it today you would earn a total of 331.00 from holding Capri Holdings or generate 16.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citi Trends vs. Capri Holdings
Performance |
| Timeline |
| Citi Trends |
| Capri Holdings |
Citi Trends and Capri Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citi Trends and Capri Holdings
The main advantage of trading using opposite Citi Trends and Capri Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citi Trends position performs unexpectedly, Capri Holdings 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 Capri Holdings will offset losses from the drop in Capri Holdings' long position.| Citi Trends vs. JJill Inc | Citi Trends vs. Zumiez Inc | Citi Trends vs. Tillys Inc | Citi Trends vs. Duluth Holdings |
| Capri Holdings vs. Movado Group | Capri Holdings vs. Signet Jewelers | Capri Holdings vs. Lanvin Group Holdings | Capri Holdings vs. TheRealReal |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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