Correlation Between Encore Wire and Citi Trends
Can any of the company-specific risk be diversified away by investing in both Encore Wire 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 Encore Wire and Citi Trends into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Encore Wire and Citi Trends, you can compare the effects of market volatilities on Encore Wire 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 Encore Wire with a short position of Citi Trends. Check out your portfolio center. Please also check ongoing floating volatility patterns of Encore Wire and Citi Trends.
Diversification Opportunities for Encore Wire and Citi Trends
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Encore and Citi is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Encore Wire and Citi Trends in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citi Trends and Encore Wire 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 Encore Wire 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 Encore Wire i.e., Encore Wire and Citi Trends go up and down completely randomly.
Pair Corralation between Encore Wire and Citi Trends
If you would invest 28,984 in Encore Wire on August 24, 2024 and sell it today you would earn a total of 0.00 from holding Encore Wire or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
Encore Wire vs. Citi Trends
Performance |
| Timeline |
| Encore Wire |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Citi Trends |
Encore Wire and Citi Trends Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Encore Wire and Citi Trends
The main advantage of trading using opposite Encore Wire and Citi Trends positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Encore Wire 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.| Encore Wire vs. Advanced Energy Industries | Encore Wire vs. Acuity Brands | Encore Wire vs. Enersys | Encore Wire vs. nVent Electric PLC |
| 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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