Correlation Between Armada Mercantile and Blockmate Ventures

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

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

Diversification Opportunities for Armada Mercantile and Blockmate Ventures

0.09

Correlation Coefficient

Armada Mercantile  Blockmate Ventures

Significant diversification

The 3 months correlation between Armada and Blockmate is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Armada Mercantile and Blockmate Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blockmate Ventures 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 Blockmate Ventures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blockmate Ventures has no effect on the direction of Armada Mercantile i.e., Armada Mercantile and Blockmate Ventures go up and down completely randomly.

Pair Corralation between Armada Mercantile and Blockmate Ventures

Assuming the 90 days horizon Armada Mercantile is expected to generate 2.02 times more return on investment than Blockmate Ventures. However, Armada Mercantile is 2.02 times more volatile than Blockmate Ventures. It trades about 0.04 of its potential returns per unit of risk. Blockmate Ventures is currently generating about -0.15 per unit of risk. 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	Moves Together
Strength	Insignificant
Accuracy	96.88%
Values	Daily Returns

Armada Mercantile  vs.  Blockmate Ventures

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.

Blockmate Ventures

Risk-Adjusted Performance

Very Weak

Over the last 90 days Blockmate Ventures 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 technical and fundamental indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Armada Mercantile and Blockmate Ventures

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

The idea behind Armada Mercantile and Blockmate Ventures 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.