Correlation Between Citadel Income and Enbridge
Can any of the company-specific risk be diversified away by investing in both Citadel Income and Enbridge 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 Enbridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citadel Income and Enbridge, you can compare the effects of market volatilities on Citadel Income and Enbridge 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 Enbridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citadel Income and Enbridge.
Diversification Opportunities for Citadel Income and Enbridge
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Citadel and Enbridge is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Citadel Income and Enbridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enbridge 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 Enbridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enbridge has no effect on the direction of Citadel Income i.e., Citadel Income and Enbridge go up and down completely randomly.
Pair Corralation between Citadel Income and Enbridge
Assuming the 90 days trading horizon Citadel Income is expected to generate 1.86 times more return on investment than Enbridge. However, Citadel Income is 1.86 times more volatile than Enbridge. It trades about 0.24 of its potential returns per unit of risk. Enbridge is currently generating about 0.07 per unit of risk. If you would invest 257.00 in Citadel Income on November 3, 2024 and sell it today you would earn a total of 26.00 from holding Citadel Income or generate 10.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citadel Income vs. Enbridge
Performance |
| Timeline |
| Citadel Income |
| Enbridge |
Citadel Income and Enbridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citadel Income and Enbridge
The main advantage of trading using opposite Citadel Income and Enbridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citadel Income position performs unexpectedly, Enbridge 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 Enbridge will offset losses from the drop in Enbridge's long position.| Citadel Income vs. Blue Ribbon Income | Citadel Income vs. MINT Income Fund | Citadel Income vs. Energy Income | Citadel Income vs. Canadian High Income |
| Enbridge vs. Suncor Energy | Enbridge vs. Toronto Dominion Bank | Enbridge vs. Bank of Nova | Enbridge vs. BCE Inc |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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