Correlation Between Citadel Income and High Tide

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

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

Diversification Opportunities for Citadel Income and High Tide

0.18

Correlation Coefficient

Citadel Income  High Tide

Average diversification

The 3 months correlation between Citadel and High is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Citadel Income and High Tide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Tide 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 High Tide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Tide has no effect on the direction of Citadel Income i.e., Citadel Income and High Tide go up and down completely randomly.

Pair Corralation between Citadel Income and High Tide

Assuming the 90 days trading horizon Citadel Income is expected to generate 7.68 times less return on investment than High Tide. But when comparing it to its historical volatility, Citadel Income is 2.18 times less risky than High Tide. It trades about 0.02 of its potential returns per unit of risk. High Tide is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  197.00  in High Tide on October 1, 2024 and sell it today you would earn a total of  242.00  from holding High Tide or generate 122.84% return on investment over 90 days.

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

Citadel Income  vs.  High Tide

Citadel Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Citadel Income has generated negative risk-adjusted returns adding no value to fund investors. 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.

High Tide

Risk-Adjusted Performance

14 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in High Tide are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, High Tide showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citadel Income and High Tide

The main advantage of trading using opposite Citadel Income and High Tide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citadel Income position performs unexpectedly, High Tide 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 High Tide will offset losses from the drop in High Tide's long position.

The idea behind Citadel Income and High Tide 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.