Correlation Between Citi Trends and United Rentals
Can any of the company-specific risk be diversified away by investing in both Citi Trends and United Rentals 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 United Rentals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citi Trends and United Rentals, you can compare the effects of market volatilities on Citi Trends and United Rentals 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 United Rentals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citi Trends and United Rentals.
Diversification Opportunities for Citi Trends and United Rentals
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Citi and United is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Citi Trends and United Rentals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Rentals 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 United Rentals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Rentals has no effect on the direction of Citi Trends i.e., Citi Trends and United Rentals go up and down completely randomly.
Pair Corralation between Citi Trends and United Rentals
Given the investment horizon of 90 days Citi Trends is expected to generate 2.78 times more return on investment than United Rentals. However, Citi Trends is 2.78 times more volatile than United Rentals. It trades about 0.51 of its potential returns per unit of risk. United Rentals is currently generating about -0.26 per unit of risk. If you would invest 1,633 in Citi Trends on September 19, 2024 and sell it today you would earn a total of 982.00 from holding Citi Trends or generate 60.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citi Trends vs. United Rentals
Performance |
| Timeline |
| Citi Trends |
| United Rentals |
Citi Trends and United Rentals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citi Trends and United Rentals
The main advantage of trading using opposite Citi Trends and United Rentals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citi Trends position performs unexpectedly, United Rentals 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 United Rentals will offset losses from the drop in United Rentals' long position.| Citi Trends vs. Capri Holdings | Citi Trends vs. Movado Group | Citi Trends vs. Tapestry | Citi Trends vs. Brilliant Earth Group |
| United Rentals vs. McGrath RentCorp | United Rentals vs. Custom Truck One | United Rentals vs. Alta Equipment Group | United Rentals vs. PROG 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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