Correlation Between Citi Trends and Vera Bradley
Can any of the company-specific risk be diversified away by investing in both Citi Trends and Vera Bradley 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 Vera Bradley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citi Trends and Vera Bradley, you can compare the effects of market volatilities on Citi Trends and Vera Bradley 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 Vera Bradley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citi Trends and Vera Bradley.
Diversification Opportunities for Citi Trends and Vera Bradley
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Citi and Vera is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Citi Trends and Vera Bradley in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vera Bradley 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 Vera Bradley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vera Bradley has no effect on the direction of Citi Trends i.e., Citi Trends and Vera Bradley go up and down completely randomly.
Pair Corralation between Citi Trends and Vera Bradley
Given the investment horizon of 90 days Citi Trends is expected to generate 1.08 times more return on investment than Vera Bradley. However, Citi Trends is 1.08 times more volatile than Vera Bradley. It trades about -0.01 of its potential returns per unit of risk. Vera Bradley is currently generating about -0.03 per unit of risk. If you would invest 2,281 in Citi Trends on September 3, 2024 and sell it today you would lose (286.00) from holding Citi Trends or give up 12.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citi Trends vs. Vera Bradley
Performance |
| Timeline |
| Citi Trends |
| Vera Bradley |
Citi Trends and Vera Bradley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citi Trends and Vera Bradley
The main advantage of trading using opposite Citi Trends and Vera Bradley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citi Trends position performs unexpectedly, Vera Bradley 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 Vera Bradley will offset losses from the drop in Vera Bradley's long position.| Citi Trends vs. JJill Inc | Citi Trends vs. Zumiez Inc | Citi Trends vs. Tillys Inc | Citi Trends vs. Duluth Holdings |
| Vera Bradley vs. Rocky Brands | Vera Bradley vs. Steven Madden | Vera Bradley vs. Wolverine World Wide | Vera Bradley vs. Caleres |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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