Correlation Between Armada Hflr and Coronation Balanced

Can any of the company-specific risk be diversified away by investing in both Armada Hflr and Coronation Balanced 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 Coronation Balanced 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 Coronation Balanced Plus, you can compare the effects of market volatilities on Armada Hflr and Coronation Balanced 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 Coronation Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Hflr and Coronation Balanced.

Diversification Opportunities for Armada Hflr and Coronation Balanced

-0.32

Correlation Coefficient

Armada Hflr  Coronation Balanced

Very good diversification

The 3 months correlation between Armada and Coronation is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Coronation Balanced Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coronation Balanced Plus 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 Coronation Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coronation Balanced Plus has no effect on the direction of Armada Hflr i.e., Armada Hflr and Coronation Balanced go up and down completely randomly.

Pair Corralation between Armada Hflr and Coronation Balanced

Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the Coronation Balanced. In addition to that, Armada Hflr is 2.43 times more volatile than Coronation Balanced Plus. It trades about -0.2 of its total potential returns per unit of risk. Coronation Balanced Plus is currently generating about 0.02 per unit of volatility. If you would invest  16,450  in Coronation Balanced Plus on December 5, 2024 and sell it today you would earn a total of  107.00  from holding Coronation Balanced Plus or generate 0.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Armada Hflr Pr  vs.  Coronation Balanced Plus

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.

Coronation Balanced Plus

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Coronation Balanced Plus are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. Despite fairly strong basic indicators, Coronation Balanced is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Armada Hflr and Coronation Balanced

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

The idea behind Armada Hflr Pr and Coronation Balanced Plus 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.