Correlation Between Armada Hflr and 4Dmedical

Can any of the company-specific risk be diversified away by investing in both Armada Hflr and 4Dmedical 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 4Dmedical 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 4Dmedical, you can compare the effects of market volatilities on Armada Hflr and 4Dmedical 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 4Dmedical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Hflr and 4Dmedical.

Diversification Opportunities for Armada Hflr and 4Dmedical

0.29

Correlation Coefficient

Armada Hflr  4Dmedical

Modest diversification

The 3 months correlation between Armada and 4Dmedical is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and 4Dmedical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 4Dmedical 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 4Dmedical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 4Dmedical has no effect on the direction of Armada Hflr i.e., Armada Hflr and 4Dmedical go up and down completely randomly.

Pair Corralation between Armada Hflr and 4Dmedical

Considering the 90-day investment horizon Armada Hflr Pr is expected to generate 0.33 times more return on investment than 4Dmedical. However, Armada Hflr Pr is 3.03 times less risky than 4Dmedical. It trades about -0.03 of its potential returns per unit of risk. 4Dmedical is currently generating about -0.01 per unit of risk. If you would invest  1,163  in Armada Hflr Pr on October 2, 2024 and sell it today you would lose (150.50) from holding Armada Hflr Pr or give up 12.94% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.2%
Values	Daily Returns

Armada Hflr Pr  vs.  4Dmedical

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 latest stock price confusion, may contribute to short-horizon losses for the traders.

4Dmedical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 4Dmedical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Armada Hflr and 4Dmedical

The main advantage of trading using opposite Armada Hflr and 4Dmedical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armada Hflr position performs unexpectedly, 4Dmedical 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 4Dmedical will offset losses from the drop in 4Dmedical's long position.

The idea behind Armada Hflr Pr and 4Dmedical 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.