Correlation Between Citi Trends and Nasdaq
Can any of the company-specific risk be diversified away by investing in both Citi Trends and Nasdaq 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 Nasdaq into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citi Trends and Nasdaq Inc, you can compare the effects of market volatilities on Citi Trends and Nasdaq 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 Nasdaq. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citi Trends and Nasdaq.
Diversification Opportunities for Citi Trends and Nasdaq
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Citi and Nasdaq is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Citi Trends and Nasdaq Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasdaq 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 Nasdaq. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasdaq Inc has no effect on the direction of Citi Trends i.e., Citi Trends and Nasdaq go up and down completely randomly.
Pair Corralation between Citi Trends and Nasdaq
Given the investment horizon of 90 days Citi Trends is expected to under-perform the Nasdaq. In addition to that, Citi Trends is 2.65 times more volatile than Nasdaq Inc. It trades about -0.04 of its total potential returns per unit of risk. Nasdaq Inc is currently generating about 0.24 per unit of volatility. If you would invest 5,831 in Nasdaq Inc on September 1, 2024 and sell it today you would earn a total of 2,468 from holding Nasdaq Inc or generate 42.33% 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. Nasdaq Inc
Performance |
| Timeline |
| Citi Trends |
| Nasdaq Inc |
Citi Trends and Nasdaq Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citi Trends and Nasdaq
The main advantage of trading using opposite Citi Trends and Nasdaq positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citi Trends position performs unexpectedly, Nasdaq 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 Nasdaq will offset losses from the drop in Nasdaq'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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| CEOs Directory Screen CEOs from public companies around the world |