Correlation Between Armada Hflr and Cap ISR

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

Diversification Opportunities for Armada Hflr and Cap ISR

0.14

Correlation Coefficient

Armada Hflr  Cap ISR

Average diversification

The 3 months correlation between Armada and Cap is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Cap ISR Actions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cap ISR Actions 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 Cap ISR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cap ISR Actions has no effect on the direction of Armada Hflr i.e., Armada Hflr and Cap ISR go up and down completely randomly.

Pair Corralation between Armada Hflr and Cap ISR

Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the Cap ISR. In addition to that, Armada Hflr is 1.89 times more volatile than Cap ISR Actions. It trades about -0.21 of its total potential returns per unit of risk. Cap ISR Actions is currently generating about 0.18 per unit of volatility. If you would invest  588.00  in Cap ISR Actions on September 22, 2024 and sell it today you would earn a total of  16.00  from holding Cap ISR Actions or generate 2.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Armada Hflr Pr  vs.  Cap ISR Actions

Armada Hflr Pr

Risk-Adjusted Performance

0 of 100

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.

Cap ISR Actions

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cap ISR Actions has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, Cap ISR is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Armada Hflr and Cap ISR

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

The idea behind Armada Hflr Pr and Cap ISR Actions 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.