Correlation Between Armada Hflr and Banco Del

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

Diversification Opportunities for Armada Hflr and Banco Del

0.13

Correlation Coefficient

Armada Hflr  Banco Del

Average diversification

The 3 months correlation between Armada and Banco is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Banco del Bajo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco del Bajo 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 Banco Del. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco del Bajo has no effect on the direction of Armada Hflr i.e., Armada Hflr and Banco Del go up and down completely randomly.

Pair Corralation between Armada Hflr and Banco Del

Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the Banco Del. But the stock apears to be less risky and, when comparing its historical volatility, Armada Hflr Pr is 1.02 times less risky than Banco Del. The stock trades about -0.32 of its potential returns per unit of risk. The Banco del Bajo is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  4,357  in Banco del Bajo on October 13, 2024 and sell it today you would lose (45.00) from holding Banco del Bajo or give up 1.03% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.0%
Values	Daily Returns

Armada Hflr Pr  vs.  Banco del Bajo

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.

Banco del Bajo

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Banco del Bajo has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward-looking indicators, Banco Del is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Armada Hflr and Banco Del

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

The idea behind Armada Hflr Pr and Banco del Bajo 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.