Correlation Between Armada Hoffler and Armada Hflr

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

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

Diversification Opportunities for Armada Hoffler and Armada Hflr

-0.19

Correlation Coefficient

Armada Hoffler  Armada Hflr

Good diversification

The 3 months correlation between Armada and Armada is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hoffler Properties and Armada Hflr Pr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Armada Hflr Pr and Armada Hoffler 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 Hoffler Properties are associated (or correlated) with Armada Hflr. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Armada Hflr Pr has no effect on the direction of Armada Hoffler i.e., Armada Hoffler and Armada Hflr go up and down completely randomly.

Pair Corralation between Armada Hoffler and Armada Hflr

Assuming the 90 days trading horizon Armada Hoffler Properties is expected to generate 0.47 times more return on investment than Armada Hflr. However, Armada Hoffler Properties is 2.12 times less risky than Armada Hflr. It trades about 0.04 of its potential returns per unit of risk. Armada Hflr Pr is currently generating about -0.21 per unit of risk. If you would invest  2,194  in Armada Hoffler Properties on December 29, 2024 and sell it today you would earn a total of  51.00  from holding Armada Hoffler Properties or generate 2.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Armada Hoffler Properties  vs.  Armada Hflr Pr

Armada Hoffler Properties

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Armada Hoffler Properties are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical indicators, Armada Hoffler is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Armada Hflr Pr

Risk-Adjusted Performance

Very Weak

Over the last 90 days Armada Hflr Pr has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Armada Hoffler and Armada Hflr

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

The idea behind Armada Hoffler Properties and Armada Hflr Pr 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..