Correlation Between Citadel Income and MCAN Mortgage

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

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

Diversification Opportunities for Citadel Income and MCAN Mortgage

0.7

Correlation Coefficient

Citadel Income  MCAN Mortgage

Poor diversification

The 3 months correlation between Citadel and MCAN is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Citadel Income and MCAN Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MCAN Mortgage 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 MCAN Mortgage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MCAN Mortgage has no effect on the direction of Citadel Income i.e., Citadel Income and MCAN Mortgage go up and down completely randomly.

Pair Corralation between Citadel Income and MCAN Mortgage

Assuming the 90 days trading horizon Citadel Income is expected to generate 1.89 times more return on investment than MCAN Mortgage. However, Citadel Income is 1.89 times more volatile than MCAN Mortgage. It trades about 0.14 of its potential returns per unit of risk. MCAN Mortgage is currently generating about 0.27 per unit of risk. If you would invest  254.00  in Citadel Income on May 21, 2025 and sell it today you would earn a total of  34.00  from holding Citadel Income or generate 13.39% return on investment over 90 days.

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

Citadel Income  vs.  MCAN Mortgage

Citadel Income

Risk-Adjusted Performance

Fair

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.

MCAN Mortgage

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in MCAN Mortgage are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, MCAN Mortgage displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citadel Income and MCAN Mortgage

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

The idea behind Citadel Income and MCAN Mortgage 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 AI Portfolio Prophet module to use AI to generate optimal portfolios and find profitable investment opportunities.