Correlation Between Ninepoint Energy and Citadel Income

Can any of the company-specific risk be diversified away by investing in both Ninepoint Energy and Citadel Income 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 Ninepoint Energy and Citadel Income into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ninepoint Energy and Citadel Income, you can compare the effects of market volatilities on Ninepoint Energy and Citadel Income 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 Ninepoint Energy with a short position of Citadel Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ninepoint Energy and Citadel Income.

Diversification Opportunities for Ninepoint Energy and Citadel Income

-0.6

Correlation Coefficient

Ninepoint Energy  Citadel Income

Excellent diversification

The 3 months correlation between Ninepoint and Citadel is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Ninepoint Energy and Citadel Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citadel Income and Ninepoint Energy 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 Ninepoint Energy are associated (or correlated) with Citadel Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citadel Income has no effect on the direction of Ninepoint Energy i.e., Ninepoint Energy and Citadel Income go up and down completely randomly.

Pair Corralation between Ninepoint Energy and Citadel Income

Assuming the 90 days trading horizon Ninepoint Energy is expected to under-perform the Citadel Income. But the fund apears to be less risky and, when comparing its historical volatility, Ninepoint Energy is 1.39 times less risky than Citadel Income. The fund trades about 0.0 of its potential returns per unit of risk. The Citadel Income is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  251.00  in Citadel Income on December 28, 2024 and sell it today you would earn a total of  52.00  from holding Citadel Income or generate 20.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	96.77%
Values	Daily Returns

Ninepoint Energy  vs.  Citadel Income

Ninepoint Energy

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ninepoint Energy has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, Ninepoint Energy is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Citadel Income

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Citadel Income are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak technical and fundamental indicators, Citadel Income sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ninepoint Energy and Citadel Income

The main advantage of trading using opposite Ninepoint Energy and Citadel Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ninepoint Energy position performs unexpectedly, Citadel Income 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 Citadel Income will offset losses from the drop in Citadel Income's long position.

The idea behind Ninepoint Energy and Citadel Income 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.

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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.