Correlation Between Armada Hflr and A2Z SMART

Can any of the company-specific risk be diversified away by investing in both Armada Hflr and A2Z SMART 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 A2Z SMART 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 A2Z SMART TECHNOLOGIES, you can compare the effects of market volatilities on Armada Hflr and A2Z SMART 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 A2Z SMART. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Hflr and A2Z SMART.

Diversification Opportunities for Armada Hflr and A2Z SMART

-0.42

Correlation Coefficient

Armada Hflr  A2Z SMART

Very good diversification

The 3 months correlation between Armada and A2Z is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and A2Z SMART TECHNOLOGIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on A2Z SMART TECHNOLOGIES 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 A2Z SMART. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of A2Z SMART TECHNOLOGIES has no effect on the direction of Armada Hflr i.e., Armada Hflr and A2Z SMART go up and down completely randomly.

Pair Corralation between Armada Hflr and A2Z SMART

Considering the 90-day investment horizon Armada Hflr is expected to generate 26.1 times less return on investment than A2Z SMART. But when comparing it to its historical volatility, Armada Hflr Pr is 6.4 times less risky than A2Z SMART. It trades about 0.02 of its potential returns per unit of risk. A2Z SMART TECHNOLOGIES is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  203.00  in A2Z SMART TECHNOLOGIES on September 17, 2024 and sell it today you would earn a total of  412.00  from holding A2Z SMART TECHNOLOGIES or generate 202.96% return on investment over 90 days.

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

Armada Hflr Pr  vs.  A2Z SMART TECHNOLOGIES

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.

A2Z SMART TECHNOLOGIES

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days A2Z SMART TECHNOLOGIES has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly uncertain basic indicators, A2Z SMART reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Armada Hflr and A2Z SMART

The main advantage of trading using opposite Armada Hflr and A2Z SMART positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armada Hflr position performs unexpectedly, A2Z SMART 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 A2Z SMART will offset losses from the drop in A2Z SMART's long position.

The idea behind Armada Hflr Pr and A2Z SMART TECHNOLOGIES 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.