Correlation Between HE Equipment and Citi Trends
Can any of the company-specific risk be diversified away by investing in both HE Equipment 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 HE Equipment and Citi Trends into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HE Equipment Services and Citi Trends, you can compare the effects of market volatilities on HE Equipment 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 HE Equipment with a short position of Citi Trends. Check out your portfolio center. Please also check ongoing floating volatility patterns of HE Equipment and Citi Trends.
Diversification Opportunities for HE Equipment and Citi Trends
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between HEES and Citi is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding HE Equipment Services and Citi Trends in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citi Trends and HE Equipment 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 HE Equipment Services 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 HE Equipment i.e., HE Equipment and Citi Trends go up and down completely randomly.
Pair Corralation between HE Equipment and Citi Trends
Given the investment horizon of 90 days HE Equipment Services is expected to generate 0.87 times more return on investment than Citi Trends. However, HE Equipment Services is 1.15 times less risky than Citi Trends. It trades about 0.05 of its potential returns per unit of risk. Citi Trends is currently generating about 0.02 per unit of risk. If you would invest 3,810 in HE Equipment Services on September 19, 2024 and sell it today you would earn a total of 1,141 from holding HE Equipment Services or generate 29.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HE Equipment Services vs. Citi Trends
Performance |
| Timeline |
| HE Equipment Services |
| Citi Trends |
HE Equipment and Citi Trends Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HE Equipment and Citi Trends
The main advantage of trading using opposite HE Equipment and Citi Trends positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HE Equipment 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.| HE Equipment vs. McGrath RentCorp | HE Equipment vs. Custom Truck One | HE Equipment vs. Alta Equipment Group | HE Equipment vs. PROG Holdings |
| Citi Trends vs. Capri Holdings | Citi Trends vs. Movado Group | Citi Trends vs. Tapestry | Citi Trends vs. Brilliant Earth Group |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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