Correlation Between Citadel Income and TD Dividend

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

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

Diversification Opportunities for Citadel Income and TD Dividend

-0.3

Correlation Coefficient

Citadel Income  TD Dividend

Very good diversification

The 3 months correlation between Citadel and 0P00016N6E is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Citadel Income and TD Dividend Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TD Dividend Growth and Citadel Income 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 Citadel Income are associated (or correlated) with TD Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TD Dividend Growth has no effect on the direction of Citadel Income i.e., Citadel Income and TD Dividend go up and down completely randomly.

Pair Corralation between Citadel Income and TD Dividend

Assuming the 90 days trading horizon Citadel Income is expected to generate 3.95 times more return on investment than TD Dividend. However, Citadel Income is 3.95 times more volatile than TD Dividend Growth. It trades about 0.05 of its potential returns per unit of risk. TD Dividend Growth is currently generating about 0.01 per unit of risk. If you would invest  252.00  in Citadel Income on October 11, 2024 and sell it today you would earn a total of  8.00  from holding Citadel Income or generate 3.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.56%
Values	Daily Returns

Citadel Income  vs.  TD Dividend Growth

Citadel Income

Risk-Adjusted Performance

2 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Citadel Income are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong technical and fundamental indicators, Citadel Income is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

TD Dividend Growth

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in TD Dividend Growth are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong basic indicators, TD Dividend is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Citadel Income and TD Dividend

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

The idea behind Citadel Income and TD Dividend Growth 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.