Correlation Between Citi Trends and Zumiez
Can any of the company-specific risk be diversified away by investing in both Citi Trends and Zumiez 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 Zumiez into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citi Trends and Zumiez Inc, you can compare the effects of market volatilities on Citi Trends and Zumiez 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 Zumiez. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citi Trends and Zumiez.
Diversification Opportunities for Citi Trends and Zumiez
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citi and Zumiez is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Citi Trends and Zumiez Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zumiez Inc 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 Zumiez. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zumiez Inc has no effect on the direction of Citi Trends i.e., Citi Trends and Zumiez go up and down completely randomly.
Pair Corralation between Citi Trends and Zumiez
Given the investment horizon of 90 days Citi Trends is expected to under-perform the Zumiez. In addition to that, Citi Trends is 1.24 times more volatile than Zumiez Inc. It trades about -0.01 of its total potential returns per unit of risk. Zumiez Inc is currently generating about 0.13 per unit of volatility. If you would invest 2,178 in Zumiez Inc on August 27, 2024 and sell it today you would earn a total of 157.00 from holding Zumiez Inc or generate 7.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citi Trends vs. Zumiez Inc
Performance |
| Timeline |
| Citi Trends |
| Zumiez Inc |
Citi Trends and Zumiez Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citi Trends and Zumiez
The main advantage of trading using opposite Citi Trends and Zumiez positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citi Trends position performs unexpectedly, Zumiez 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 Zumiez will offset losses from the drop in Zumiez's long position.| Citi Trends vs. JJill Inc | Citi Trends vs. Zumiez Inc | Citi Trends vs. Tillys Inc | Citi Trends vs. Duluth 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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