Correlation Between Armada Hflr and Sany Heavy

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

Diversification Opportunities for Armada Hflr and Sany Heavy

-0.44

Correlation Coefficient

Armada Hflr  Sany Heavy

Very good diversification

The 3 months correlation between Armada and Sany is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Sany Heavy Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sany Heavy Energy 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 Sany Heavy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sany Heavy Energy has no effect on the direction of Armada Hflr i.e., Armada Hflr and Sany Heavy go up and down completely randomly.

Pair Corralation between Armada Hflr and Sany Heavy

Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the Sany Heavy. But the stock apears to be less risky and, when comparing its historical volatility, Armada Hflr Pr is 1.81 times less risky than Sany Heavy. The stock trades about -0.21 of its potential returns per unit of risk. The Sany Heavy Energy is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  3,044  in Sany Heavy Energy on September 22, 2024 and sell it today you would earn a total of  156.00  from holding Sany Heavy Energy or generate 5.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Armada Hflr Pr  vs.  Sany Heavy Energy

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.

Sany Heavy Energy

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sany Heavy Energy are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Sany Heavy sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Armada Hflr and Sany Heavy

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

The idea behind Armada Hflr Pr and Sany Heavy Energy 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.