Correlation Between Alphabet and Citadel Income

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

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

Diversification Opportunities for Alphabet and Citadel Income

0.62

Correlation Coefficient

Alphabet  Citadel Income

Poor diversification

The 3 months correlation between Alphabet and Citadel is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Alphabet Inc Class C and Citadel Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citadel Income and Alphabet 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 Alphabet Inc Class C 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 Alphabet i.e., Alphabet and Citadel Income go up and down completely randomly.

Pair Corralation between Alphabet and Citadel Income

Given the investment horizon of 90 days Alphabet Inc Class C is expected to generate 0.94 times more return on investment than Citadel Income. However, Alphabet Inc Class C is 1.06 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 0.13 per unit of risk. If you would invest  16,561  in Alphabet Inc Class C on May 2, 2025 and sell it today you would earn a total of  3,183  from holding Alphabet Inc Class C or generate 19.22% return on investment over 90 days.

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

Alphabet Inc Class C  vs.  Citadel Income

Alphabet Class C

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Alphabet Inc Class C are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting basic indicators, Alphabet reported solid returns over the last few months and may actually be approaching a breakup point.

Citadel Income

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citadel Income are ranked lower than 10 (%) 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 Alphabet and Citadel Income

The main advantage of trading using opposite Alphabet and Citadel Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alphabet 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 Alphabet Inc Class C 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.