Correlation Between Armada Hflr and Ateliers Mecaniques

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

Diversification Opportunities for Armada Hflr and Ateliers Mecaniques

0.38

Correlation Coefficient

Armada Hflr  Ateliers Mecaniques

Weak diversification

The 3 months correlation between Armada and Ateliers is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Ateliers Mecaniques DIndonesie in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ateliers Mecaniques 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 Ateliers Mecaniques. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ateliers Mecaniques has no effect on the direction of Armada Hflr i.e., Armada Hflr and Ateliers Mecaniques go up and down completely randomly.

Pair Corralation between Armada Hflr and Ateliers Mecaniques

Considering the 90-day investment horizon Armada Hflr is expected to generate 1.6 times less return on investment than Ateliers Mecaniques. But when comparing it to its historical volatility, Armada Hflr Pr is 2.41 times less risky than Ateliers Mecaniques. It trades about 0.02 of its potential returns per unit of risk. Ateliers Mecaniques DIndonesie is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  14,696  in Ateliers Mecaniques DIndonesie on September 15, 2024 and sell it today you would earn a total of  4.00  from holding Ateliers Mecaniques DIndonesie or generate 0.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Armada Hflr Pr  vs.  Ateliers Mecaniques DIndonesie

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.

Ateliers Mecaniques

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ateliers Mecaniques DIndonesie has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Ateliers Mecaniques is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Armada Hflr and Ateliers Mecaniques

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

The idea behind Armada Hflr Pr and Ateliers Mecaniques DIndonesie 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.