Correlation Between Citi Trends and Gladstone Investment
Can any of the company-specific risk be diversified away by investing in both Citi Trends and Gladstone Investment 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 Gladstone Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citi Trends and Gladstone Investment, you can compare the effects of market volatilities on Citi Trends and Gladstone Investment 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 Gladstone Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citi Trends and Gladstone Investment.
Diversification Opportunities for Citi Trends and Gladstone Investment
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citi and Gladstone is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Citi Trends and Gladstone Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gladstone Investment 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 Gladstone Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gladstone Investment has no effect on the direction of Citi Trends i.e., Citi Trends and Gladstone Investment go up and down completely randomly.
Pair Corralation between Citi Trends and Gladstone Investment
Given the investment horizon of 90 days Citi Trends is expected to under-perform the Gladstone Investment. In addition to that, Citi Trends is 6.02 times more volatile than Gladstone Investment. It trades about -0.07 of its total potential returns per unit of risk. Gladstone Investment is currently generating about 0.09 per unit of volatility. If you would invest 2,407 in Gladstone Investment on September 1, 2024 and sell it today you would earn a total of 193.00 from holding Gladstone Investment or generate 8.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.47% |
| Values | Daily Returns |
Citi Trends vs. Gladstone Investment
Performance |
| Timeline |
| Citi Trends |
| Gladstone Investment |
Citi Trends and Gladstone Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citi Trends and Gladstone Investment
The main advantage of trading using opposite Citi Trends and Gladstone Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citi Trends position performs unexpectedly, Gladstone Investment 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 Gladstone Investment will offset losses from the drop in Gladstone Investment's long position.| Citi Trends vs. JJill Inc | Citi Trends vs. Zumiez Inc | Citi Trends vs. Tillys Inc | Citi Trends vs. Duluth Holdings |
| Gladstone Investment vs. Acco Brands | Gladstone Investment vs. Skillful Craftsman Education | Gladstone Investment vs. Agnico Eagle Mines | Gladstone Investment vs. AMREP |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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