Correlation Between Armada Hflr and Investment

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

Diversification Opportunities for Armada Hflr and Investment

-0.89

Correlation Coefficient

Armada Hflr  Investment

Pay attention - limited upside

The 3 months correlation between Armada and Investment is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Investment and Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investment and Industrial 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 Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investment and Industrial has no effect on the direction of Armada Hflr i.e., Armada Hflr and Investment go up and down completely randomly.

Pair Corralation between Armada Hflr and Investment

Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the Investment. In addition to that, Armada Hflr is 1.3 times more volatile than Investment and Industrial. It trades about -0.21 of its total potential returns per unit of risk. Investment and Industrial is currently generating about 0.12 per unit of volatility. If you would invest  6,980,000  in Investment and Industrial on December 30, 2024 and sell it today you would earn a total of  780,000  from holding Investment and Industrial or generate 11.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	96.77%
Values	Daily Returns

Armada Hflr Pr  vs.  Investment and Industrial

Armada Hflr Pr

Risk-Adjusted Performance

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 April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Investment and Industrial

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Investment and Industrial are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating primary indicators, Investment may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Armada Hflr and Investment

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

The idea behind Armada Hflr Pr and Investment and Industrial 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.