Correlation Between Citadel Income and Medical Facilities

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Can any of the company-specific risk be diversified away by investing in both Citadel Income and Medical Facilities 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 Medical Facilities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citadel Income and Medical Facilities, you can compare the effects of market volatilities on Citadel Income and Medical Facilities 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 Medical Facilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citadel Income and Medical Facilities.

Diversification Opportunities for Citadel Income and Medical Facilities

-0.27
  Correlation Coefficient

Very good diversification

The 3 months correlation between Citadel and Medical is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Citadel Income and Medical Facilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medical Facilities 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 Medical Facilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medical Facilities has no effect on the direction of Citadel Income i.e., Citadel Income and Medical Facilities go up and down completely randomly.

Pair Corralation between Citadel Income and Medical Facilities

Assuming the 90 days trading horizon Citadel Income is expected to generate 3.9 times less return on investment than Medical Facilities. In addition to that, Citadel Income is 1.12 times more volatile than Medical Facilities. It trades about 0.02 of its total potential returns per unit of risk. Medical Facilities is currently generating about 0.1 per unit of volatility. If you would invest  1,401  in Medical Facilities on October 8, 2024 and sell it today you would earn a total of  140.00  from holding Medical Facilities or generate 9.99% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy98.36%
ValuesDaily Returns

Citadel Income  vs.  Medical Facilities

 Performance 
       Timeline  
Citadel Income 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Citadel Income are ranked lower than 1 (%) 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.
Medical Facilities 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Medical Facilities are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Medical Facilities may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Citadel Income and Medical Facilities Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Citadel Income and Medical Facilities

The main advantage of trading using opposite Citadel Income and Medical Facilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citadel Income position performs unexpectedly, Medical Facilities 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 Medical Facilities will offset losses from the drop in Medical Facilities' long position.
The idea behind Citadel Income and Medical Facilities 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.
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.

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