Correlation Between Armada Hflr and Shenzhen Sunlord

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Can any of the company-specific risk be diversified away by investing in both Armada Hflr and Shenzhen Sunlord 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 Hflr and Shenzhen Sunlord into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Armada Hflr Pr and Shenzhen Sunlord Electronics, you can compare the effects of market volatilities on Armada Hflr and Shenzhen Sunlord 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 Hflr with a short position of Shenzhen Sunlord. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Hflr and Shenzhen Sunlord.

Diversification Opportunities for Armada Hflr and Shenzhen Sunlord

ArmadaShenzhenDiversified AwayArmadaShenzhenDiversified Away100%
-0.46
  Correlation Coefficient

Very good diversification

The 3 months correlation between Armada and Shenzhen is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Shenzhen Sunlord Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Sunlord Ele and Armada Hflr 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 Hflr Pr are associated (or correlated) with Shenzhen Sunlord. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Sunlord Ele has no effect on the direction of Armada Hflr i.e., Armada Hflr and Shenzhen Sunlord go up and down completely randomly.

Pair Corralation between Armada Hflr and Shenzhen Sunlord

Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the Shenzhen Sunlord. But the stock apears to be less risky and, when comparing its historical volatility, Armada Hflr Pr is 1.76 times less risky than Shenzhen Sunlord. The stock trades about -0.13 of its potential returns per unit of risk. The Shenzhen Sunlord Electronics is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  2,296  in Shenzhen Sunlord Electronics on September 22, 2024 and sell it today you would earn a total of  979.00  from holding Shenzhen Sunlord Electronics or generate 42.64% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy93.75%
ValuesDaily Returns

Armada Hflr Pr  vs.  Shenzhen Sunlord Electronics

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -100102030
JavaScript chart by amCharts 3.21.15AHH 002138
       Timeline  
Armada Hflr Pr 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec10.210.410.610.81111.211.4
Shenzhen Sunlord Ele 

Risk-Adjusted Performance

17 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Shenzhen Sunlord Electronics are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Shenzhen Sunlord sustained solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec242628303234

Armada Hflr and Shenzhen Sunlord Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.75-2.08-1.4-0.72-0.04590.541.131.722.312.9 0.040.060.080.100.120.14
JavaScript chart by amCharts 3.21.15AHH 002138
       Returns  

Pair Trading with Armada Hflr and Shenzhen Sunlord

The main advantage of trading using opposite Armada Hflr and Shenzhen Sunlord positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armada Hflr position performs unexpectedly, Shenzhen Sunlord 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 Shenzhen Sunlord will offset losses from the drop in Shenzhen Sunlord's long position.
The idea behind Armada Hflr Pr and Shenzhen Sunlord Electronics 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.

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