Correlation Between Duluth Holdings and Citi Trends
Can any of the company-specific risk be diversified away by investing in both Duluth Holdings and Citi Trends 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 Duluth Holdings and Citi Trends into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Duluth Holdings and Citi Trends, you can compare the effects of market volatilities on Duluth Holdings and Citi Trends 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 Duluth Holdings with a short position of Citi Trends. Check out your portfolio center. Please also check ongoing floating volatility patterns of Duluth Holdings and Citi Trends.
Diversification Opportunities for Duluth Holdings and Citi Trends
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Duluth and Citi is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Duluth Holdings and Citi Trends in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citi Trends and Duluth Holdings 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 Duluth Holdings are associated (or correlated) with Citi Trends. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citi Trends has no effect on the direction of Duluth Holdings i.e., Duluth Holdings and Citi Trends go up and down completely randomly.
Pair Corralation between Duluth Holdings and Citi Trends
Given the investment horizon of 90 days Duluth Holdings is expected to under-perform the Citi Trends. But the stock apears to be less risky and, when comparing its historical volatility, Duluth Holdings is 1.05 times less risky than Citi Trends. The stock trades about -0.03 of its potential returns per unit of risk. The Citi Trends is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 3,110 in Citi Trends on August 23, 2024 and sell it today you would lose (1,321) from holding Citi Trends or give up 42.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Duluth Holdings vs. Citi Trends
Performance |
| Timeline |
| Duluth Holdings |
| Citi Trends |
Duluth Holdings and Citi Trends Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Duluth Holdings and Citi Trends
The main advantage of trading using opposite Duluth Holdings and Citi Trends positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Duluth Holdings position performs unexpectedly, Citi Trends 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 Citi Trends will offset losses from the drop in Citi Trends' long position.| Duluth Holdings vs. Ross Stores | Duluth Holdings vs. Childrens Place | Duluth Holdings vs. Guess Inc | Duluth Holdings vs. Cato Corporation |
| 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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