Correlation Between Citi Trends and Stitch Fix
Can any of the company-specific risk be diversified away by investing in both Citi Trends and Stitch Fix 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 Stitch Fix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citi Trends and Stitch Fix, you can compare the effects of market volatilities on Citi Trends and Stitch Fix 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 Stitch Fix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citi Trends and Stitch Fix.
Diversification Opportunities for Citi Trends and Stitch Fix
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Citi and Stitch is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Citi Trends and Stitch Fix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stitch Fix 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 Stitch Fix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stitch Fix has no effect on the direction of Citi Trends i.e., Citi Trends and Stitch Fix go up and down completely randomly.
Pair Corralation between Citi Trends and Stitch Fix
Given the investment horizon of 90 days Citi Trends is expected to under-perform the Stitch Fix. But the stock apears to be less risky and, when comparing its historical volatility, Citi Trends is 1.88 times less risky than Stitch Fix. The stock trades about -0.01 of its potential returns per unit of risk. The Stitch Fix is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 408.00 in Stitch Fix on September 3, 2024 and sell it today you would earn a total of 68.00 from holding Stitch Fix or generate 16.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citi Trends vs. Stitch Fix
Performance |
| Timeline |
| Citi Trends |
| Stitch Fix |
Citi Trends and Stitch Fix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citi Trends and Stitch Fix
The main advantage of trading using opposite Citi Trends and Stitch Fix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citi Trends position performs unexpectedly, Stitch Fix 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 Stitch Fix will offset losses from the drop in Stitch Fix'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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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