Correlation Between Armada Hflr and GraniteShares

Can any of the company-specific risk be diversified away by investing in both Armada Hflr and GraniteShares 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 GraniteShares 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 GraniteShares 3x Long, you can compare the effects of market volatilities on Armada Hflr and GraniteShares 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 GraniteShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Hflr and GraniteShares.

Diversification Opportunities for Armada Hflr and GraniteShares

-0.4

Correlation Coefficient

Armada Hflr  GraniteShares

Very good diversification

The 3 months correlation between Armada and GraniteShares is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and GraniteShares 3x Long in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GraniteShares 3x Long 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 GraniteShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GraniteShares 3x Long has no effect on the direction of Armada Hflr i.e., Armada Hflr and GraniteShares go up and down completely randomly.

Pair Corralation between Armada Hflr and GraniteShares

Considering the 90-day investment horizon Armada Hflr is expected to generate 30.68 times less return on investment than GraniteShares. But when comparing it to its historical volatility, Armada Hflr Pr is 2.87 times less risky than GraniteShares. It trades about 0.02 of its potential returns per unit of risk. GraniteShares 3x Long is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  722.00  in GraniteShares 3x Long on September 16, 2024 and sell it today you would earn a total of  9,311  from holding GraniteShares 3x Long or generate 1289.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	72.78%
Values	Daily Returns

Armada Hflr Pr  vs.  GraniteShares 3x Long

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 latest weak performance, the Stock's technical indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

GraniteShares 3x Long

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in GraniteShares 3x Long are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, GraniteShares unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Armada Hflr and GraniteShares

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

The idea behind Armada Hflr Pr and GraniteShares 3x Long 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.