Correlation Between WaveFront All and Citadel Income

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Can any of the company-specific risk be diversified away by investing in both WaveFront All 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 WaveFront All and Citadel Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WaveFront All Weather Alternative and Citadel Income, you can compare the effects of market volatilities on WaveFront All 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 WaveFront All with a short position of Citadel Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of WaveFront All and Citadel Income.

Diversification Opportunities for WaveFront All and Citadel Income

0.69
  Correlation Coefficient

Poor diversification

The 3 months correlation between WaveFront and Citadel is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding WaveFront All Weather Alternat and Citadel Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citadel Income and WaveFront All 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 WaveFront All Weather Alternative 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 WaveFront All i.e., WaveFront All and Citadel Income go up and down completely randomly.

Pair Corralation between WaveFront All and Citadel Income

Assuming the 90 days trading horizon WaveFront All is expected to generate 2.2 times less return on investment than Citadel Income. But when comparing it to its historical volatility, WaveFront All Weather Alternative is 3.11 times less risky than Citadel Income. It trades about 0.17 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 Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy96.88%
ValuesDaily Returns

WaveFront All Weather Alternat  vs.  Citadel Income

 Performance 
       Timeline  
WaveFront All Weather 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in WaveFront All Weather Alternative are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of very unfluctuating basic indicators, WaveFront All may actually be approaching a critical reversion point that can send shares even higher in August 2025.
Citadel Income 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
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.

WaveFront All and Citadel Income Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with WaveFront All and Citadel Income

The main advantage of trading using opposite WaveFront All and Citadel Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WaveFront All 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 WaveFront All Weather Alternative 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .

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