Correlation Between Genesco and Citi Trends
Can any of the company-specific risk be diversified away by investing in both Genesco 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 Genesco and Citi Trends into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genesco and Citi Trends, you can compare the effects of market volatilities on Genesco 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 Genesco with a short position of Citi Trends. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genesco and Citi Trends.
Diversification Opportunities for Genesco and Citi Trends
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Genesco and Citi is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Genesco and Citi Trends in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citi Trends and Genesco 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 Genesco 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 Genesco i.e., Genesco and Citi Trends go up and down completely randomly.
Pair Corralation between Genesco and Citi Trends
Considering the 90-day investment horizon Genesco is expected to generate 1.21 times more return on investment than Citi Trends. However, Genesco is 1.21 times more volatile than Citi Trends. It trades about 0.02 of its potential returns per unit of risk. Citi Trends is currently generating about -0.02 per unit of risk. If you would invest 3,136 in Genesco on August 27, 2024 and sell it today you would earn a total of 24.00 from holding Genesco or generate 0.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genesco vs. Citi Trends
Performance |
| Timeline |
| Genesco |
| Citi Trends |
Genesco and Citi Trends Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genesco and Citi Trends
The main advantage of trading using opposite Genesco and Citi Trends positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genesco 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.The idea behind Genesco and Citi Trends pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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