Correlation Between Armada Acquisition and Atlantic Energy

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

By analyzing existing cross correlation between Armada Acquisition Corp and Atlantic Energy Solutions, you can compare the effects of market volatilities on Armada Acquisition and Atlantic Energy 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 Armada Acquisition with a short position of Atlantic Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Acquisition and Atlantic Energy.

Diversification Opportunities for Armada Acquisition and Atlantic Energy

0.1

Correlation Coefficient

Armada Acquisition  Atlantic Energy

Average diversification

The 3 months correlation between Armada and Atlantic is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Armada Acquisition Corp and Atlantic Energy Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlantic Energy Solutions and Armada Acquisition 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 Armada Acquisition Corp are associated (or correlated) with Atlantic Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlantic Energy Solutions has no effect on the direction of Armada Acquisition i.e., Armada Acquisition and Atlantic Energy go up and down completely randomly.

Pair Corralation between Armada Acquisition and Atlantic Energy

If you would invest  1.60  in Atlantic Energy Solutions on September 4, 2024 and sell it today you would lose (0.15) from holding Atlantic Energy Solutions or give up 9.37% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Armada Acquisition Corp  vs.  Atlantic Energy Solutions

Armada Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Armada Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward indicators, Armada Acquisition is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Atlantic Energy Solutions

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Atlantic Energy Solutions are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Atlantic Energy displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Armada Acquisition and Atlantic Energy

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

The idea behind Armada Acquisition Corp and Atlantic Energy Solutions 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.