Correlation Between Armada Hflr and Adhera Therapeutics

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

Diversification Opportunities for Armada Hflr and Adhera Therapeutics

0.1

Correlation Coefficient

Armada Hflr  Adhera Therapeutics

Average diversification

The 3 months correlation between Armada and Adhera is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Adhera Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adhera Therapeutics 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 Adhera Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adhera Therapeutics has no effect on the direction of Armada Hflr i.e., Armada Hflr and Adhera Therapeutics go up and down completely randomly.

Pair Corralation between Armada Hflr and Adhera Therapeutics

Considering the 90-day investment horizon Armada Hflr is expected to generate 611.33 times less return on investment than Adhera Therapeutics. But when comparing it to its historical volatility, Armada Hflr Pr is 10.5 times less risky than Adhera Therapeutics. It trades about 0.0 of its potential returns per unit of risk. Adhera Therapeutics is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  64.00  in Adhera Therapeutics on October 7, 2024 and sell it today you would earn a total of  8.00  from holding Adhera Therapeutics or generate 12.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	3.63%
Values	Daily Returns

Armada Hflr Pr  vs.  Adhera Therapeutics

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

Adhera Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Adhera Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Adhera Therapeutics is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Armada Hflr and Adhera Therapeutics

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

The idea behind Armada Hflr Pr and Adhera Therapeutics 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.