Correlation Between Armada Mercantile and EBullion

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

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

Diversification Opportunities for Armada Mercantile and EBullion

0.0

Correlation Coefficient

Armada Mercantile  EBullion

Pay attention - limited upside

The 3 months correlation between Armada and EBullion is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Armada Mercantile and EBullion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EBullion and Armada Mercantile 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 Mercantile are associated (or correlated) with EBullion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EBullion has no effect on the direction of Armada Mercantile i.e., Armada Mercantile and EBullion go up and down completely randomly.

Pair Corralation between Armada Mercantile and EBullion

If you would invest  30.00  in Armada Mercantile on December 30, 2024 and sell it today you would lose (10.00) from holding Armada Mercantile or give up 33.33% of portfolio value over 90 days.

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

Armada Mercantile  vs.  EBullion

Armada Mercantile

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Armada Mercantile are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Armada Mercantile reported solid returns over the last few months and may actually be approaching a breakup point.

EBullion

Risk-Adjusted Performance

Very Weak

Over the last 90 days EBullion has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent primary indicators, EBullion is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Armada Mercantile and EBullion

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

The idea behind Armada Mercantile and EBullion 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.