Correlation Between Citi Trends and Chongqing Rural
Can any of the company-specific risk be diversified away by investing in both Citi Trends and Chongqing Rural 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 Chongqing Rural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citi Trends and Chongqing Rural Commercial, you can compare the effects of market volatilities on Citi Trends and Chongqing Rural 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 Chongqing Rural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citi Trends and Chongqing Rural.
Diversification Opportunities for Citi Trends and Chongqing Rural
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Citi and Chongqing is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Citi Trends and Chongqing Rural Commercial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Rural Comm 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 Chongqing Rural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Rural Comm has no effect on the direction of Citi Trends i.e., Citi Trends and Chongqing Rural go up and down completely randomly.
Pair Corralation between Citi Trends and Chongqing Rural
Given the investment horizon of 90 days Citi Trends is expected to generate 10.95 times less return on investment than Chongqing Rural. But when comparing it to its historical volatility, Citi Trends is 2.06 times less risky than Chongqing Rural. It trades about 0.01 of its potential returns per unit of risk. Chongqing Rural Commercial is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,769 in Chongqing Rural Commercial on October 1, 2024 and sell it today you would earn a total of 823.00 from holding Chongqing Rural Commercial or generate 46.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 63.18% |
| Values | Daily Returns |
Citi Trends vs. Chongqing Rural Commercial
Performance |
| Timeline |
| Citi Trends |
| Chongqing Rural Comm |
Citi Trends and Chongqing Rural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citi Trends and Chongqing Rural
The main advantage of trading using opposite Citi Trends and Chongqing Rural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citi Trends position performs unexpectedly, Chongqing Rural 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 Chongqing Rural will offset losses from the drop in Chongqing Rural's long position.| Citi Trends vs. Macys Inc | Citi Trends vs. Wayfair | Citi Trends vs. 1StdibsCom | Citi Trends vs. AutoNation |
| Chongqing Rural vs. Everus Construction Group | Chongqing Rural vs. Jeld Wen Holding | Chongqing Rural vs. Integrated Drilling Equipment | Chongqing Rural vs. Tyson Foods |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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