Correlation Between Australian REIT and Citadel Income

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

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

Diversification Opportunities for Australian REIT and Citadel Income

0.0

Correlation Coefficient

Australian REIT  Citadel Income

Pay attention - limited upside

The 3 months correlation between Australian and Citadel is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Australian REIT Income and Citadel Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citadel Income and Australian REIT 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 Australian REIT Income 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 Australian REIT i.e., Australian REIT and Citadel Income go up and down completely randomly.

Pair Corralation between Australian REIT and Citadel Income

If you would invest  239.00  in Citadel Income on September 4, 2024 and sell it today you would earn a total of  11.00  from holding Citadel Income or generate 4.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Australian REIT Income  vs.  Citadel Income

Australian REIT Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Australian REIT Income has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Australian REIT is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Citadel Income

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Citadel Income are ranked lower than 3 (%) 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.

Pair Trading with Australian REIT and Citadel Income

The main advantage of trading using opposite Australian REIT and Citadel Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Australian REIT 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 Australian REIT Income 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.