Correlation Between Guardian Investment and Citadel Income

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

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

Diversification Opportunities for Guardian Investment and Citadel Income

0.29

Correlation Coefficient

Guardian Investment  Citadel Income

Modest diversification

The 3 months correlation between Guardian and Citadel is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Guardian Investment Grade and Citadel Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citadel Income and Guardian Investment 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 Guardian Investment Grade 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 Guardian Investment i.e., Guardian Investment and Citadel Income go up and down completely randomly.

Pair Corralation between Guardian Investment and Citadel Income

Assuming the 90 days trading horizon Guardian Investment is expected to generate 235.7 times less return on investment than Citadel Income. But when comparing it to its historical volatility, Guardian Investment Grade is 9.36 times less risky than Citadel Income. It trades about 0.0 of its potential returns per unit of risk. Citadel Income is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  244.00  in Citadel Income on April 20, 2025 and sell it today you would earn a total of  35.00  from holding Citadel Income or generate 14.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Guardian Investment Grade  vs.  Citadel Income

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 recent stock price disarray, may contribute to short-term losses for the investors.

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.

Pair Trading with Guardian Investment and Citadel Income

The main advantage of trading using opposite Guardian Investment and Citadel Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guardian Investment 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 Guardian Investment Grade 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.