Correlation Between Edgepoint Global and Citadel Income

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

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

Diversification Opportunities for Edgepoint Global and Citadel Income

-0.04

Correlation Coefficient

Edgepoint Global  Citadel Income

Good diversification

The 3 months correlation between Edgepoint and Citadel is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Edgepoint Global Portfolio and Citadel Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citadel Income and Edgepoint Global 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 Edgepoint Global Portfolio 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 Edgepoint Global i.e., Edgepoint Global and Citadel Income go up and down completely randomly.

Pair Corralation between Edgepoint Global and Citadel Income

Assuming the 90 days trading horizon Edgepoint Global Portfolio is expected to under-perform the Citadel Income. But the fund apears to be less risky and, when comparing its historical volatility, Edgepoint Global Portfolio is 2.67 times less risky than Citadel Income. The fund trades about -0.01 of its potential returns per unit of risk. The Citadel Income is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  245.00  in Citadel Income on September 23, 2024 and sell it today you would earn a total of  15.00  from holding Citadel Income or generate 6.12% return on investment over 90 days.

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

Edgepoint Global Portfolio  vs.  Citadel Income

Edgepoint Global Por

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Edgepoint Global Portfolio has generated negative risk-adjusted returns adding no value to fund investors. Despite fairly strong forward indicators, Edgepoint Global is not utilizing all of its potentials. The new stock price confusion, may contribute to short-horizon losses for the traders.

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 weak technical and fundamental indicators, Citadel Income may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Edgepoint Global and Citadel Income

The main advantage of trading using opposite Edgepoint Global and Citadel Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edgepoint Global 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 Edgepoint Global Portfolio 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.

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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.