Correlation Between Armada Hflr and Brompton Enhanced

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

Diversification Opportunities for Armada Hflr and Brompton Enhanced

0.5

Correlation Coefficient

Armada Hflr  Brompton Enhanced

Very weak diversification

The 3 months correlation between Armada and Brompton is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Brompton Enhanced Multi Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brompton Enhanced Multi 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 Brompton Enhanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brompton Enhanced Multi has no effect on the direction of Armada Hflr i.e., Armada Hflr and Brompton Enhanced go up and down completely randomly.

Pair Corralation between Armada Hflr and Brompton Enhanced

Considering the 90-day investment horizon Armada Hflr is expected to generate 16.15 times less return on investment than Brompton Enhanced. In addition to that, Armada Hflr is 2.28 times more volatile than Brompton Enhanced Multi Asset. It trades about 0.0 of its total potential returns per unit of risk. Brompton Enhanced Multi Asset is currently generating about 0.08 per unit of volatility. If you would invest  1,070  in Brompton Enhanced Multi Asset on October 7, 2024 and sell it today you would earn a total of  307.00  from holding Brompton Enhanced Multi Asset or generate 28.69% return on investment over 90 days.

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

Armada Hflr Pr  vs.  Brompton Enhanced Multi Asset

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.

Brompton Enhanced Multi

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Brompton Enhanced Multi Asset are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Brompton Enhanced is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Armada Hflr and Brompton Enhanced

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

The idea behind Armada Hflr Pr and Brompton Enhanced Multi Asset 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.

Check out your portfolio center.

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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.