Correlation Between Citi Trends and Fast Retailing
Can any of the company-specific risk be diversified away by investing in both Citi Trends and Fast Retailing 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 Fast Retailing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citi Trends and Fast Retailing Co, you can compare the effects of market volatilities on Citi Trends and Fast Retailing 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 Fast Retailing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citi Trends and Fast Retailing.
Diversification Opportunities for Citi Trends and Fast Retailing
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citi and Fast is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Citi Trends and Fast Retailing Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fast Retailing 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 Fast Retailing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fast Retailing has no effect on the direction of Citi Trends i.e., Citi Trends and Fast Retailing go up and down completely randomly.
Pair Corralation between Citi Trends and Fast Retailing
Given the investment horizon of 90 days Citi Trends is expected to generate 0.92 times more return on investment than Fast Retailing. However, Citi Trends is 1.09 times less risky than Fast Retailing. It trades about 0.22 of its potential returns per unit of risk. Fast Retailing Co is currently generating about 0.01 per unit of risk. If you would invest 1,383 in Citi Trends on September 2, 2024 and sell it today you would earn a total of 612.00 from holding Citi Trends or generate 44.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citi Trends vs. Fast Retailing Co
Performance |
| Timeline |
| Citi Trends |
| Fast Retailing |
Citi Trends and Fast Retailing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citi Trends and Fast Retailing
The main advantage of trading using opposite Citi Trends and Fast Retailing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citi Trends position performs unexpectedly, Fast Retailing 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 Fast Retailing will offset losses from the drop in Fast Retailing's long position.| Citi Trends vs. JJill Inc | Citi Trends vs. Zumiez Inc | Citi Trends vs. Tillys Inc | Citi Trends vs. Duluth Holdings |
| Fast Retailing vs. Industria de Diseno | Fast Retailing vs. Shoe Carnival | Fast Retailing vs. Genesco | Fast Retailing vs. Ross Stores |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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