Correlation Between Citi Trends and Playa Hotels
Can any of the company-specific risk be diversified away by investing in both Citi Trends and Playa Hotels 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 Playa Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citi Trends and Playa Hotels Resorts, you can compare the effects of market volatilities on Citi Trends and Playa Hotels 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 Playa Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citi Trends and Playa Hotels.
Diversification Opportunities for Citi Trends and Playa Hotels
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citi and Playa is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Citi Trends and Playa Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playa Hotels Resorts 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 Playa Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Playa Hotels Resorts has no effect on the direction of Citi Trends i.e., Citi Trends and Playa Hotels go up and down completely randomly.
Pair Corralation between Citi Trends and Playa Hotels
Given the investment horizon of 90 days Citi Trends is expected to under-perform the Playa Hotels. In addition to that, Citi Trends is 1.64 times more volatile than Playa Hotels Resorts. It trades about -0.01 of its total potential returns per unit of risk. Playa Hotels Resorts is currently generating about 0.07 per unit of volatility. If you would invest 575.00 in Playa Hotels Resorts on August 28, 2024 and sell it today you would earn a total of 415.00 from holding Playa Hotels Resorts or generate 72.17% 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. Playa Hotels Resorts
Performance |
| Timeline |
| Citi Trends |
| Playa Hotels Resorts |
Citi Trends and Playa Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citi Trends and Playa Hotels
The main advantage of trading using opposite Citi Trends and Playa Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citi Trends position performs unexpectedly, Playa Hotels 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 Playa Hotels will offset losses from the drop in Playa Hotels' long position.| Citi Trends vs. JJill Inc | Citi Trends vs. Zumiez Inc | Citi Trends vs. Tillys Inc | Citi Trends vs. Duluth Holdings |
| Playa Hotels vs. Yatra Online | Playa Hotels vs. Mondee Holdings | Playa Hotels vs. TripAdvisor | Playa Hotels vs. Thayer Ventures Acquisition |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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