Correlation Between Citi Trends and Visteon Corp
Can any of the company-specific risk be diversified away by investing in both Citi Trends and Visteon Corp 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 Visteon Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citi Trends and Visteon Corp, you can compare the effects of market volatilities on Citi Trends and Visteon Corp 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 Visteon Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citi Trends and Visteon Corp.
Diversification Opportunities for Citi Trends and Visteon Corp
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Citi and Visteon is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Citi Trends and Visteon Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Visteon Corp 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 Visteon Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Visteon Corp has no effect on the direction of Citi Trends i.e., Citi Trends and Visteon Corp go up and down completely randomly.
Pair Corralation between Citi Trends and Visteon Corp
Given the investment horizon of 90 days Citi Trends is expected to generate 1.59 times more return on investment than Visteon Corp. However, Citi Trends is 1.59 times more volatile than Visteon Corp. It trades about 0.02 of its potential returns per unit of risk. Visteon Corp is currently generating about -0.06 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. Visteon Corp
Performance |
| Timeline |
| Citi Trends |
| Visteon Corp |
Citi Trends and Visteon Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citi Trends and Visteon Corp
The main advantage of trading using opposite Citi Trends and Visteon Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citi Trends position performs unexpectedly, Visteon Corp 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 Visteon Corp will offset losses from the drop in Visteon Corp's long position.| Citi Trends vs. Foot Locker | Citi Trends vs. Lands End | Citi Trends vs. Duluth Holdings | Citi Trends vs. Destination XL Group |
| Visteon Corp vs. Cooper Stnd | Visteon Corp vs. Motorcar Parts of | Visteon Corp vs. Stoneridge | Visteon Corp vs. Dorman Products |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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