Correlation Between Armada Mercantile and ICOA

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

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

Diversification Opportunities for Armada Mercantile and ICOA

0.0

Correlation Coefficient

Armada Mercantile  ICOA

Pay attention - limited upside

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

Pair Corralation between Armada Mercantile and ICOA

If you would invest  0.01  in ICOA Inc on September 3, 2024 and sell it today you would earn a total of  0.00  from holding ICOA Inc or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Armada Mercantile  vs.  ICOA Inc

Armada Mercantile

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Armada Mercantile has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

ICOA Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ICOA Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, ICOA is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Armada Mercantile and ICOA

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

The idea behind Armada Mercantile and ICOA Inc 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.