Correlation Between Citadel Income and Guardian Investment

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

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

Diversification Opportunities for Citadel Income and Guardian Investment

0.29

Correlation Coefficient

Citadel Income  Guardian Investment

Modest diversification

The 3 months correlation between Citadel and Guardian is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Citadel Income and Guardian Investment Grade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardian Investment Grade 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 Guardian Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guardian Investment Grade has no effect on the direction of Citadel Income i.e., Citadel Income and Guardian Investment go up and down completely randomly.

Pair Corralation between Citadel Income and Guardian Investment

Assuming the 90 days trading horizon Citadel Income is expected to generate 9.36 times more return on investment than Guardian Investment. However, Citadel Income is 9.36 times more volatile than Guardian Investment Grade. It trades about 0.12 of its potential returns per unit of risk. Guardian Investment Grade is currently generating about 0.0 per unit of risk. If you would invest  245.00  in Citadel Income on April 22, 2025 and sell it today you would earn a total of  34.00  from holding Citadel Income or generate 13.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Citadel Income  vs.  Guardian Investment Grade

Citadel Income

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citadel Income are ranked lower than 9 (%) 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.

Guardian Investment Grade

Risk-Adjusted Performance

Very Weak

Over the last 90 days Guardian Investment Grade has generated negative risk-adjusted returns adding no value to fund investors. In spite of very healthy basic indicators, Guardian Investment is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Citadel Income and Guardian Investment

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

The idea behind Citadel Income and Guardian Investment Grade 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.