Correlation Between Citi Trends and Sphere Entertainment
Can any of the company-specific risk be diversified away by investing in both Citi Trends and Sphere Entertainment 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 Sphere Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citi Trends and Sphere Entertainment Co, you can compare the effects of market volatilities on Citi Trends and Sphere Entertainment 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 Sphere Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citi Trends and Sphere Entertainment.
Diversification Opportunities for Citi Trends and Sphere Entertainment
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Citi and Sphere is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Citi Trends and Sphere Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sphere Entertainment 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 Sphere Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sphere Entertainment has no effect on the direction of Citi Trends i.e., Citi Trends and Sphere Entertainment go up and down completely randomly.
Pair Corralation between Citi Trends and Sphere Entertainment
Given the investment horizon of 90 days Citi Trends is expected to generate 1.46 times more return on investment than Sphere Entertainment. However, Citi Trends is 1.46 times more volatile than Sphere Entertainment Co. It trades about -0.01 of its potential returns per unit of risk. Sphere Entertainment Co is currently generating about -0.16 per unit of risk. If you would invest 1,991 in Citi Trends on August 28, 2024 and sell it today you would lose (34.00) from holding Citi Trends or give up 1.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citi Trends vs. Sphere Entertainment Co
Performance |
| Timeline |
| Citi Trends |
| Sphere Entertainment |
Citi Trends and Sphere Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citi Trends and Sphere Entertainment
The main advantage of trading using opposite Citi Trends and Sphere Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citi Trends position performs unexpectedly, Sphere Entertainment 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 Sphere Entertainment will offset losses from the drop in Sphere Entertainment's long position.| Citi Trends vs. JJill Inc | Citi Trends vs. Zumiez Inc | Citi Trends vs. Tillys Inc | Citi Trends vs. Duluth Holdings |
| Sphere Entertainment vs. Tandem Diabetes Care | Sphere Entertainment vs. Weyco Group | Sphere Entertainment vs. Viemed Healthcare | Sphere Entertainment vs. Amgen Inc |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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