Correlation Between Citi Trends and Virco Manufacturing
Can any of the company-specific risk be diversified away by investing in both Citi Trends and Virco Manufacturing 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 Virco Manufacturing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citi Trends and Virco Manufacturing, you can compare the effects of market volatilities on Citi Trends and Virco Manufacturing 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 Virco Manufacturing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citi Trends and Virco Manufacturing.
Diversification Opportunities for Citi Trends and Virco Manufacturing
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Citi and Virco is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Citi Trends and Virco Manufacturing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virco Manufacturing 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 Virco Manufacturing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virco Manufacturing has no effect on the direction of Citi Trends i.e., Citi Trends and Virco Manufacturing go up and down completely randomly.
Pair Corralation between Citi Trends and Virco Manufacturing
Given the investment horizon of 90 days Citi Trends is expected to under-perform the Virco Manufacturing. But the stock apears to be less risky and, when comparing its historical volatility, Citi Trends is 1.43 times less risky than Virco Manufacturing. The stock trades about -0.04 of its potential returns per unit of risk. The Virco Manufacturing is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,144 in Virco Manufacturing on September 2, 2024 and sell it today you would earn a total of 498.00 from holding Virco Manufacturing or generate 43.53% 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. Virco Manufacturing
Performance |
| Timeline |
| Citi Trends |
| Virco Manufacturing |
Citi Trends and Virco Manufacturing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citi Trends and Virco Manufacturing
The main advantage of trading using opposite Citi Trends and Virco Manufacturing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citi Trends position performs unexpectedly, Virco Manufacturing 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 Virco Manufacturing will offset losses from the drop in Virco Manufacturing's long position.| Citi Trends vs. JJill Inc | Citi Trends vs. Zumiez Inc | Citi Trends vs. Tillys Inc | Citi Trends vs. Duluth Holdings |
| Virco Manufacturing vs. Bassett Furniture Industries | Virco Manufacturing vs. Hooker Furniture | Virco Manufacturing vs. Natuzzi SpA | Virco Manufacturing vs. Flexsteel 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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