Correlation Between Citadel Income and CI Global

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

By analyzing existing cross correlation between Citadel Income and CI Global Alpha, you can compare the effects of market volatilities on Citadel Income and CI Global 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 CI Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citadel Income and CI Global.

Diversification Opportunities for Citadel Income and CI Global

0.13

Correlation Coefficient

Citadel Income  CI Global

Average diversification

The 3 months correlation between Citadel and CIG18006 is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Citadel Income and CI Global Alpha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Global Alpha 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 CI Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Global Alpha has no effect on the direction of Citadel Income i.e., Citadel Income and CI Global go up and down completely randomly.

Pair Corralation between Citadel Income and CI Global

Assuming the 90 days trading horizon Citadel Income is expected to generate 4.25 times less return on investment than CI Global. In addition to that, Citadel Income is 1.28 times more volatile than CI Global Alpha. It trades about 0.03 of its total potential returns per unit of risk. CI Global Alpha is currently generating about 0.14 per unit of volatility. If you would invest  4,379  in CI Global Alpha on September 21, 2024 and sell it today you would earn a total of  6,603  from holding CI Global Alpha or generate 150.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Citadel Income  vs.  CI Global Alpha

Citadel Income

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Citadel Income are ranked lower than 4 (%) 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.

CI Global Alpha

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CI Global Alpha are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak basic indicators, CI Global sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citadel Income and CI Global

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

The idea behind Citadel Income and CI Global Alpha 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 Global Correlations module to find global opportunities by holding instruments from different markets.