Correlation Between Energy Income and Citadel Income
Can any of the company-specific risk be diversified away by investing in both Energy Income 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 Energy Income and Citadel Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energy Income and Citadel Income, you can compare the effects of market volatilities on Energy Income 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 Energy Income with a short position of Citadel Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energy Income and Citadel Income.
Diversification Opportunities for Energy Income and Citadel Income
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Energy and Citadel is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Energy Income and Citadel Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citadel Income and Energy 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 Energy 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 Energy Income i.e., Energy Income and Citadel Income go up and down completely randomly.
Pair Corralation between Energy Income and Citadel Income
Assuming the 90 days trading horizon Energy Income is expected to generate 0.57 times more return on investment than Citadel Income. However, Energy Income is 1.77 times less risky than Citadel Income. It trades about 0.05 of its potential returns per unit of risk. Citadel Income is currently generating about -0.12 per unit of risk. If you would invest 172.00 in Energy Income on September 1, 2024 and sell it today you would earn a total of 2.00 from holding Energy Income or generate 1.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Energy Income vs. Citadel Income
Performance |
| Timeline |
| Energy Income |
| Citadel Income |
Energy Income and Citadel Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energy Income and Citadel Income
The main advantage of trading using opposite Energy Income and Citadel Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energy Income 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.| Energy Income vs. E Split Corp | Energy Income vs. Brompton Split Banc | Energy Income vs. Life Banc Split | Energy Income vs. Real Estate E Commerce |
| Citadel Income vs. Tech Leaders Income | Citadel Income vs. Brompton Global Dividend | Citadel Income vs. Forstrong Global Income | Citadel Income vs. iShares Canadian HYBrid |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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