Correlation Between Armada Hflr and Steadfast Group

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

Diversification Opportunities for Armada Hflr and Steadfast Group

-0.21

Correlation Coefficient

Armada Hflr  Steadfast Group

Very good diversification

The 3 months correlation between Armada and Steadfast is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Steadfast Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steadfast Group 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 Steadfast Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steadfast Group has no effect on the direction of Armada Hflr i.e., Armada Hflr and Steadfast Group go up and down completely randomly.

Pair Corralation between Armada Hflr and Steadfast Group

Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the Steadfast Group. But the stock apears to be less risky and, when comparing its historical volatility, Armada Hflr Pr is 1.48 times less risky than Steadfast Group. The stock trades about -0.02 of its potential returns per unit of risk. The Steadfast Group Limited is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  358.00  in Steadfast Group Limited on September 29, 2024 and sell it today you would lose (16.00) from holding Steadfast Group Limited or give up 4.47% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.21%
Values	Daily Returns

Armada Hflr Pr  vs.  Steadfast Group Limited

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.

Steadfast Group

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Steadfast Group Limited are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Steadfast Group is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Armada Hflr and Steadfast Group

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

The idea behind Armada Hflr Pr and Steadfast Group Limited 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.