Correlation Between RBC Select and Citadel Income

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

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

Diversification Opportunities for RBC Select and Citadel Income

0.74

Correlation Coefficient

RBC Select  Citadel Income

Poor diversification

The 3 months correlation between RBC and Citadel is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding RBC Select Balanced and Citadel Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citadel Income and RBC Select 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 RBC Select Balanced 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 RBC Select i.e., RBC Select and Citadel Income go up and down completely randomly.

Pair Corralation between RBC Select and Citadel Income

Assuming the 90 days trading horizon RBC Select is expected to generate 2.14 times less return on investment than Citadel Income. But when comparing it to its historical volatility, RBC Select Balanced is 4.56 times less risky than Citadel Income. It trades about 0.3 of its potential returns per unit of risk. Citadel Income is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  249.00  in Citadel Income on April 16, 2025 and sell it today you would earn a total of  44.00  from holding Citadel Income or generate 17.67% return on investment over 90 days.

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

RBC Select Balanced  vs.  Citadel Income

RBC Select Balanced

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in RBC Select Balanced are ranked lower than 24 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak basic indicators, RBC Select may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Citadel Income

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Citadel Income are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak technical and fundamental indicators, Citadel Income sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with RBC Select and Citadel Income

The main advantage of trading using opposite RBC Select and Citadel Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RBC Select 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 RBC Select Balanced 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..