Correlation Between Armada Hflr and BCV Swiss

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

Diversification Opportunities for Armada Hflr and BCV Swiss

-0.48

Correlation Coefficient

Armada Hflr  BCV Swiss

Very good diversification

The 3 months correlation between Armada and BCV is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and BCV Swiss Franc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BCV Swiss Franc 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 BCV Swiss. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BCV Swiss Franc has no effect on the direction of Armada Hflr i.e., Armada Hflr and BCV Swiss go up and down completely randomly.

Pair Corralation between Armada Hflr and BCV Swiss

Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the BCV Swiss. In addition to that, Armada Hflr is 12.5 times more volatile than BCV Swiss Franc. It trades about -0.27 of its total potential returns per unit of risk. BCV Swiss Franc is currently generating about 0.18 per unit of volatility. If you would invest  10,709  in BCV Swiss Franc on September 27, 2024 and sell it today you would earn a total of  41.00  from holding BCV Swiss Franc or generate 0.38% return on investment over 90 days.

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

Armada Hflr Pr  vs.  BCV Swiss Franc

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 fairly strong technical indicators, Armada Hflr is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

BCV Swiss Franc

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BCV Swiss Franc are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. Even with relatively invariable basic indicators, BCV Swiss is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Armada Hflr and BCV Swiss

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

The idea behind Armada Hflr Pr and BCV Swiss Franc 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.