Correlation Between Foot Locker and CITIC
Can any of the company-specific risk be diversified away by investing in both Foot Locker and CITIC 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 Foot Locker and CITIC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Foot Locker and CITIC Limited, you can compare the effects of market volatilities on Foot Locker and CITIC 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 Foot Locker with a short position of CITIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Foot Locker and CITIC.
Diversification Opportunities for Foot Locker and CITIC
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Foot and CITIC is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Foot Locker and CITIC Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIC Limited and Foot Locker 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 Foot Locker are associated (or correlated) with CITIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITIC Limited has no effect on the direction of Foot Locker i.e., Foot Locker and CITIC go up and down completely randomly.
Pair Corralation between Foot Locker and CITIC
Allowing for the 90-day total investment horizon Foot Locker is expected to under-perform the CITIC. In addition to that, Foot Locker is 1.59 times more volatile than CITIC Limited. It trades about -0.03 of its total potential returns per unit of risk. CITIC Limited is currently generating about -0.02 per unit of volatility. If you would invest 111.00 in CITIC Limited on January 26, 2024 and sell it today you would lose (23.00) from holding CITIC Limited or give up 20.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Foot Locker vs. CITIC Limited
Performance |
| Timeline |
| Foot Locker |
| CITIC Limited |
Foot Locker and CITIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Foot Locker and CITIC
The main advantage of trading using opposite Foot Locker and CITIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Foot Locker position performs unexpectedly, CITIC 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 CITIC will offset losses from the drop in CITIC's long position.| Foot Locker vs. Abercrombie Fitch | Foot Locker vs. Gap Inc | Foot Locker vs. Urban Outfitters | Foot Locker vs. Childrens Place |
| CITIC vs. Grupo Bimbo SAB | CITIC vs. Grupo Financiero Inbursa | CITIC vs. Arca Continental SAB | CITIC vs. Becle SA de |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |