Correlation Between Citi Trends and Thor Industries
Can any of the company-specific risk be diversified away by investing in both Citi Trends and Thor Industries 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 Thor Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citi Trends and Thor Industries, you can compare the effects of market volatilities on Citi Trends and Thor Industries 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 Thor Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citi Trends and Thor Industries.
Diversification Opportunities for Citi Trends and Thor Industries
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Citi and Thor is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Citi Trends and Thor Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thor Industries 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 Thor Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thor Industries has no effect on the direction of Citi Trends i.e., Citi Trends and Thor Industries go up and down completely randomly.
Pair Corralation between Citi Trends and Thor Industries
Given the investment horizon of 90 days Citi Trends is expected to generate 1.39 times more return on investment than Thor Industries. However, Citi Trends is 1.39 times more volatile than Thor Industries. It trades about 0.02 of its potential returns per unit of risk. Thor Industries is currently generating about 0.0 per unit of risk. If you would invest 2,506 in Citi Trends on September 12, 2024 and sell it today you would earn a total of 17.00 from holding Citi Trends or generate 0.68% 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. Thor Industries
Performance |
| Timeline |
| Citi Trends |
| Thor Industries |
Citi Trends and Thor Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citi Trends and Thor Industries
The main advantage of trading using opposite Citi Trends and Thor Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citi Trends position performs unexpectedly, Thor Industries 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 Thor Industries will offset losses from the drop in Thor Industries' long position.| Citi Trends vs. Foot Locker | Citi Trends vs. Lands End | Citi Trends vs. Duluth Holdings | Citi Trends vs. Destination XL Group |
| Thor Industries vs. Marine Products | Thor Industries vs. Malibu Boats | Thor Industries vs. Brunswick | Thor Industries vs. LCI Industries |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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